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FCC approves Charter/Time Warner Cable deal; state regulatory vote last hurdle

Charter CommunicationsInc. is a big step closer to completing its merger with and a related acquisitionof Bright House Networks LLC.

Charter said May 6 that it received approval from the FCC forboth transactions. According to data from SNL Kagan, the transaction value for theTime Warner Cable mergerstands at $79.16 billion, while the value for the Bright House Networks stands at $10.4 billion.

The approval was widely expected given that FCC Chairman TomWheeler had previously circulated an orderrecommending the deals be approved with conditions.

The conditions, effective for seven years after the transactionsclose, prohibit the combined entity from entering into contracts that limit a programmer'sability to distribute content to online video distributors. The merged company alsowould be barred from imposing data caps or charging usage-based pricing on broadbandusers or from charging interconnection fees on online video providers that deliverlarge volumes of traffic to its customers.

In a May 6 statement, Charter CEO Tom Rutledge said the conditionswere not a source of concern for the company. "The conditions are largely extensionsof the longstanding consumer friendly values and practices of our company, and basedon the commitments we put forward during the review process," he said. "Charterwill be a stronger competitor in the broadband and video markets, well positionedto deliver these benefits and more to consumers."

Before the deals can close, they must also be approved by theCalifornia Public Utilities Commission, which is set to vote on the transactionMay 12. A chief administrative law judge has already recommended the commission approve the deals based on a furtherset of conditions. Specifically, the judge said the commission should approve thedeals with a requirement that Charter increase broadband download speeds for all-digitalhouseholds to at least 60 Mbps, as well as give all customers the option to buytheir own modems and cable set-top-boxes without any increase in the price of services.Further, the combined entity must remain in full compliance with the FCC's OpenInternet Order.