On Monday, the U.S. Department of Justice and the FCC's chairman Tom Wheeler cleared a $78 deal for Charter Communications to purchase Time Warner Cable and Bright House Networks for $78 billion. It's now expected to be approved by the FCC and join other TV and Internet megadeals such as AT&T's 2014 purchase of DirecTV.
Last year, merger talks raised concerns about whether Charter would make big changes for Time Warner Cable customers but also raised hopes that such a deal could help Time Warner with its notorious customer-service problems and improve its infrastructure. Charter will end up with about 17.3 million video customers and about 19.4 broadband subscribers, making it the second-largest Internet provider and third-larger cable company in the country.
Here's what you need to know if you're a Time Warner Cable customer:
FCC rules state that after the merger, Charter will not be allowed to charge usage-based fees for Internet service or impose so-called bandwidth caps for its customers. That means current Time Warner customers shouldn't expect to see their bills change based on how much Internet data they're downloading per month during that seven-year period.
Under merger rules, Charter will not be allowed to impede online video distributors by making agreements that keep networks from putting shows online. Charter won't be able to charge companies that depend on its network to deliver their content to customers so-called "Interconnect" fees for that same seven-year period. That's good news for Amazon Prime Video, HBO Now, Netflix and other video services that use a large amounts of data on ISPs.
It might need more than magic. According to the American Consumer Satisfaction Index, Charter's own customer-satisfaction record is not significantly higher than TWC's in TV and is actually lower in Internet service,
Primarily serving parts of Florida, the nation's sixth-largest video provider with about 2 million customers is also part of the deal. Bright House also has customers in Alabama, Indiana, Michigan and California. That part of the deal is worth $10.4 billion. By comparison, Time Warner Cable operates in 29 states with about 16 million customers.
Dow Jones suggests it could be voted in by the FCC within days.
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