Fellow cable operator Mediacom is riding to Charter’s defense as it petitions the FCC for early release from conditions tied to its Time Warner Cable acquisition.
Mediacom – a U.S. cable operator that counts more than 1.4 million customers in smaller markets primarily in the Midwest and Southeast – met with the FCC to voice its support for Charter. Charter has asked the FCC for an early release from a condition that prevents it from using data caps and usage-based pricing.
Mediacom argued that the original rationale for the condition – to prevent Charter from using usage-based pricing to harm online video providers – no longer holds water.
“…Today’s video marketplace bears scant resemblance to that of five years ago. The numbers tell the tale: as growth in the video side of the cable business has stagnated or declined, growth in the broadband side of the business has been soaring,” wrote Mediacom in an FCC filing. “This is true not just for Charter, but for all cable companies, including Mediacom. Indeed, Mediacom now has more than twice as many high-speed data customers as it has traditional video customers.”
Charter added video subscribers during the second quarter – an astonishingly rare occurrence for a traditional video distributor – but attributed the increase to its high-speed broadband services growing faster than its current rate of video declines.
Mediacom said that usage-based pricing allows cable operators to structure their broadband service plans in a way that accommodates customers who use a limited amount of data with “budget-friendly” options, while also allowing heavy users to opt for higher data caps with higher prices. The company said if cable operators weren’t able to use usage-based pricing, either all customers would end up paying more or customers who use less data would effectively subsidize plans for customers who are heavy broadband users.
“Obviously, Mediacom is not directly impacted by whether or not the Commission grants Charter’s petition. But continuing the DC/UBP condition paints those companies that offer such options in a bad light and encourages efforts to restrict such options, notwithstanding the evidence that they are consumer-friendly,” Mediacom wrote.
Charter has asked the FCC to sunset the data cap and usage-based pricing condition in 2021. The cable operator late last week received a favorable ruling from the U.S. Court of Appeals for the D.C. Circuit regarding its petition to lift merger conditions that have prevented it from charging interconnect fees to streaming video companies like Netflix.