Charter Communications Inc. has won the support of a major
player in its bid to win regulatory approval for the Time Warner
Cable acquisition: Netflix Inc.
On Wednesday, Netflix told the Federal Communications Commission
that it will support the proposed Charter-TWC deal so long as
Charter goes through with implementing the new Internet backbone
interconnection policy it has proposed.
Netflix's support removes a potential hurdle for Charter's deal,
after the streaming service vocally opposed Comcast Corp.'s failed
attempt to buy Time Warner Cable. Charter has been holding
discussions with Netflix to work out a policy that the company
could get behind, according to a Charter spokesman.
The policy addresses the way that content companies like Netflix
and long-haul telecom companies like Level 3 Communications hand
off Web traffic to broadband providers like Charter that serve
customers' homes. Charter's new policy, outlined in a letter to the
FCC on Wednesday, essentially supports the concept of
interconnecting with such providers for free.
These so-called interconnection deals have become greater flash
points of contention in recent years, as streaming video, music and
gaming have grown in popularity, increasing the amount of traffic
funneled into broadband providers' networks and forcing them to
upgrade their infrastructure at a rapid clip.
Charter's new policy is notable because it is a departure from
those of other cable companies such as Comcast and Time Warner
Cable, which had demanded that Netflix pay for such deals. Though
Netflix grudgingly struck a "paid" interconnection deal with
Comcast early last year, it lashed out publicly against the
practice of charging and made the deal a cornerstone of its
opposition to Comcast's merger with TWC.
In a letter filed to the FCC on Wednesday, Chris Libertelli,
Netflix's vice president of global public policy, said Charter's
new policy is a "substantial public interest benefit" that "will
support scaling the Internet to meet consumers' growing demand for
online services."
Netflix's vehement opposition to Comcast's deal helped influence
regulators' sentiment against it. The dominance of a combined
Comcast-TWC in U.S. broadband and the influence it may have had on
the burgeoning online video market were key reasons regulators were
prepared to try to block the deal. Comcast called off the merger in
April.
Charter said it would maintain a "settlement-free"
interconnection policy until Dec. 31, 2018. The spokesman said
Charter will start implementing the policy immediately.
Write to Shalini Ramachandran at
shalini.ramachandran@wsj.com
Access Investor Kit for Charter Communications, Inc.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US16117M3051
Access Investor Kit for Comcast Corp.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US20030N1019
Access Investor Kit for Comcast Corp.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US20030N2009
Access Investor Kit for Level 3 Communications, Inc.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US52729N3089
Access Investor Kit for Netflix, Inc.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US64110L1061
Access Investor Kit for Time Warner Cable, Inc.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US88732J2078
Subscribe to WSJ: http://online.wsj.com?mod=djnwires