Broadband Churn Data Shows Charter Has no Reason not To Throttle OTT Competition, Dish Says

Broadband customer churn data from when Netflix was being throttled in 2014 shows Charter Communications after buying Bright House Networks and Time Warner Cable "will be able to have its cake and eat it too: hurt competitors of its video business without hurting its broadband business," Dish Network said in its latest salvo of opposition to the proposed set of deals. In a filing Wednesday in docket 15-149, Dish -- which has staunchly opposed FCC approval of the deals -- submitted a heavily redacted Charter, BHN and TWC churn rate analysis by William Zarakas of economics consulting firm Brattle Group to argue the companies didn't suffer worse churn rates due to past throttling. "Even if we assume that most broadband customers understand the reason for a poor broadband experience -- a very large assumption -- switching is most often impossible because there is no reasonable broadband alternative in the marketplace," Dish said. It also repeated arguments it made in the past that post-merger Charter would have plenty of opportunity and motive to form a de facto duopoly with Comcast -- especially since major Charter shareholder John Malone "has been described as 'keen to see the industry consolidate, noting that cooperation would complement mergers.'" In a statement, Charter said, given Dish's "past history of manipulating government regulations to improve its business, it is not surprising [it] is opposing Charter’s pending transactions. Dish’s claims are without merit. The information on which Dish relies, as well as documents filed with the FCC that Dish ignores, demonstrates Charter’s recognition that [online video distributors, or] OVDs[,] are a complement to its growing broadband business. There is no better partner for OVDs than Charter; we provide fast broadband speeds at a better value, with no data caps, no usage based billing, no modem fees, and no annual contracts.” Charter also pointed to comments Tuesday by Netflix CEO Reed Hastings during the company's Q4 2015 earnings call (see 1601190069) in which he said Charter/TWC/BHN "would be a tremendous positive for the [over-the-top] industry because Charter has agreed to a multi-year strong net neutrality policy, something no one else has publicly agreed to. That means that we, Hulu, Amazon and others can compete on an open basis." Charter increasingly is responding to critics. In a blog post Tuesday, Charter said red flags raised by Incompas (see 1512070025) were "incorrect and illogical." The trade group "makes the classic merger analysis mistake of confusing harm to New Charter’s competitors with harm to competition," Charter said. "Aren’t lower prices good for consumers and competition? [Under Incompas' logic] mergers would be good if they result in higher prices because that would encourage investment by new entrants. That kind of spin does not pass the laugh test." Charter also said since TWC already buys programming for BHN, adding Charter to the buying group means an extra 4 million subscribers, or about 4 percent of the nation's multichannel video programming distributor marketplace -- "not an overwhelming increase by any measure," and smaller than Comcast or AT&T.