	Overview

In May 2015, Charter Communications, Inc. announced that it reached agreements with Time Warner Cable Inc. (TWC) to merge the two companies in a deal valued at $78.7 billion, including the assumption of debt, and with Advance/Newhouse Partnership to acquire Bright House Networks (BHN) for $10.4 billion. The combination of Charter, TWC, and BHN would create a single entity providing cable television and broadband access service to 23.9 million customers in 41 states, making it the nation's second-largest cable television operator and broadband access provider. At the federal level, the U.S. Department of Justice (DOJ) and the Federal Communications Commission (FCC) must approve the transactions before they can close. As regulatory authorities begin their review of the proposed transactions, four key issues may merit analysis: 
1. Members of Charter's board of directors also serve on the boards of several companies that create television programming, such as cable networks Discovery and Starz and film and television studio Lions Gate. These interlinks could potentially enable Charter to impede competition in the distribution of video programming. John Malone, a major investor in Charter, controls a significant stake in Charter's competitor, DIRECTV. Regulators may be concerned that Malone's influence over the combined AT&T-DIRECTV and the merged Charter could thwart competition among video distributors to acquire programming from creators and to sell programming to consumers. TWC has various joint ventures and partnerships with Comcast Corporation, the largest cable television and broadband access provider in the United States. Regulators may be concerned that the merger would result in close relations between Comcast and Charter, potentially reducing competition to acquire programming from creators and among broadband access providers distributing programming from online video distributors. However, Charter is expected to assume in excess of $24 billion of debt to finance the transaction. The FCC may be concerned that the debt could limit Charter's ability to fulfil its commitments to improve service quality and availability. Television Industry Background

The television industry comprises many players. Because of this complex structure, many companies in the television industry are in frequent negotiation with one another for the right to transmit programming or to retransmit broadcast signals. The proposed Charter transactions, by altering the television industry's structure, could affect competition as well. The parties, not the agency, have the burden of demonstrating that the proposed transactions would be in the public interest based on a preponderance of evidence. 2. 3. In addition, the agencies may evaluate whether Charter's proposed commitments would be sufficient to mitigate potential harms. To verify this claim, the FCC would need to investigate whether TWC and BHN were planning to make such investments independently, absent the proposed transaction. The FCC may be concerned that Charter's debt could compromise its ability to fulfil commitments to provide sufficient capacity to deliver online video and other services to its broadband subscribers. MVPDs' national market shares indicate the relative bargaining power the MVPDs have when negotiating with studios and networks to deliver programming to video subscribers.
In May 2015, Charter Communications, Inc. announced that it reached agreements with Time Warner Cable Inc. (TWC) to merge the two companies in a deal valued at $78.7 billion, including the assumption of debt, and with Advance/Newhouse Partnership to acquire Bright House Networks (BHN) for $10.4 billion. The combination of Charter, TWC, and BHN would create a single entity providing cable television and broadband access service to 23.9 million customers in 41 states, making it the nation's second-largest cable television operator and broadband access provider.
The proposed merger raises a number of potential concerns, reflecting the complex structure of the television industry and substantial changes in the way consumers choose to receive video programming. The many firms involved in content ownership, aggregation and packaging, and distribution of video programming often must cooperate with one another at the same time they are competing. Companies in the television industry are in frequent negotiation with one another for the right to transmit programming, and the merger of three players into a very large one could change the relative bargaining power of other parties. At the same time, growing numbers of consumers are now viewing programs online at a time of their choosing rather than subscribing to traditional cable or satellite services or watching based on a broadcaster's schedule. The proposed Charter transactions have the potential to affect the development of this relatively new online video distribution industry by inhibiting distributors' access to programming or their ability to send programs to customers over the Internet.
At the federal level, both the U.S. Department of Justice (DOJ) and the Federal Communication Commission (FCC) must approve Charter's transactions before they can close. The DOJ will investigate whether the proposed transactions would reduce competition. The FCC will investigate whether the proposed transactions would, on balance, be in the public interest.
As regulatory authorities begin their review of Charter's proposed transactions, three key issues related to television industry competition may merit analysis: 1) whether the presence of members of Charter's board of directors on the boards of several companies that create television programming, including the cable networks Discovery and Starz and film and television studio Lions Gate, might impede competition in the distribution of television programming; 2) whether the fact that a major investor in Charter, John Malone, also controls some shares of a competitor to Charter, DIRECTV (whose proposed sale to AT&T has met federal regulatory approval), could reduce competition among video distributors to acquire programming from creators and to sell programming to consumers; and 3) whether Charter's assumption of TWC's various joint ventures and partnerships with Comcast Corporation, the largest cable television and broadband access provider in the United States, would reduce competition to acquire programming from creators and disadvantage online video distributors.
In addition, the agencies may evaluate whether Charter's proposed commitments regarding service quality and availability would be sufficient to mitigate potential harms. To obtain FCC approval, Charter is likely to make a number of commitments regarding service quality and availability. However, the company would assume more than $24 billion of debt through the transactions, and the FCC may be concerned that this debt could compromise Charter's ability to fulfil commitments to provide sufficient capacity to deliver online video and other services to its broadband subscribers.