Speaking at Charter Communications' (NASDAQ: CHTR) fourth-quarter earnings call Thursday, company president and CEO Tom Rutledge said stringent Title II-oriented regulation likely to be passed by the FCC won't have a material impact on the cable industry.
Rutledge (Source: Charter)
Still, he compared the specter of the FCC's oversight to a "bazooka pointed right at us."
"The issue with Title II, as it's currently described, it doesn't look like it changes anything," Rutledge told investors. "Our concern is that it increases power of regulatory body in unnecessary way. We've had a very good experience putting private capital to work in developing high speed Internet service. It seems to me to be an excessive approach, so we're opposed to it."
He added, "We never had a problem with net neutrality, we've never been asked to prioritize content by any website, never had any experience where net neutrality was an issue. Because it was our business model and because it wasn't a problem, I signed on for the light touch net neutrality. And that was working fine before it was overturned by the courts. This new approach is a heavy handed regulatory solution for problem that doesn't exist."
Rutledge was also asked how Title II might impact the Comcast (NASDAQ: CMCSA)-Time Warner Cable (NYSE: TWC) mega merger, in which Charter is intimately involved.
"There's going to be long period of litigation and uncertainty as to what the rules are," he said. "We're going to have to operate in that uncertainty. So I don't know how it affects the transaction."
The Charter chief executive said he has no insight as to whether regulators are turning negative on the deal. Asked if Charter would be interested in pursuing TWC if the deal were to fall through, he had this to say:
"We as a company are interested in acquisition because we strongly believe that the cable business is a good business, has potential for growth. And any platform that's out there that would allow us to take advantage of scale and unsold passings is interesting to us at right price. If Time Warner were to fall into that position, we'd be interested. But there's a lot of ifs there."
The Q4 essentials
Charter reported 9.9 percent revenue growth in the fourth quarter to $2.4 billion, driven by residential revenue growth of 8.3 percent, commercial revenue growth of 16.1 percent and advertising revenue expansion of 28.9 percent.
Residential video subscribers stayed flat at just over 4.1 million, while high-speed residential Internet customers increased 9 percent to nearly 4.8 million.
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