CEI Joins Coalition with Center for Individual Freedom in Strong Support of Charter–Cox Merger to Advance Free-Market Innovation and Consumer Benefits

Dear Secretary Dortch:

The undersigned organizations submit this letter to the Federal Communications Commission (hereinafter FCC) in support of the proposed combination of Charter Communications, Inc. (Charter) and Cox Communications, Inc. (Cox) set forth in the above-referenced proceeding.

As experience has repeatedly proven, a free-market system that minimizes government intervention in favor of allowing American businesses to make economic decisions driven by competition and marketplace realities in which those companies operate results in the highest levels of consumer benefit, economic growth and technological innovation. Accordingly, government’s role in the telecommunications marketplace should be a limited and focused one that allows businesses to compete freely on a level playing field to attract customers based on their innovative products and services, business efficiency, and competitive pricing.

With that in mind, the pending transaction will unambiguously foster a more competitive and dynamic telecommunications landscape, thereby benefitting American consumers and satisfying the FCC’s overarching “Public Interest Standard” for multiple reasons.

The Cox-Charter Merger Will Deliver Clear Competitive and Consumer Benefits

First, it must be noted that the wireline internet, mobile and video marketplace has never been more competitive. That’s an important consideration because it means that the proposed merger would not somehow lead to a monolithic market for consumers. Specifically, an increasing number of companies not only compete, but also cross into each other’s traditional business lines, intensifying market dynamics, and expanding consumer options.

Against that backdrop, the combination of Cox and Charter positions the combined company to deliver consumer benefits that far outweigh any potential harms.

For instance, the scale of a combined Charter-Cox company would create greater operating efficiencies, driving down service costs and enhancing competition in the marketplace. As outlined in the pending application, consumers in Cox’s territory would benefit from Charter’s customer service commitments — such as same-day technician dispatches and guaranteed pricing on bundled internet, mobile, or video packages.

As noted by George Mason University Antonin Scalia School of Law Associate Professor Robert Luther III, “The deal is consistent with this administration’s antitrust objectives and protects U.S. workers and competition. The Charter–Cox merger aims to combine two of the country’s leading broadband and cable providers — which have virtually no overlapping service areas — across several regions.” Professor

Luther continued, “This is a case in which non-overlapping footprints, network investment, and enhanced competitor leverage suggest better outcomes for consumers — not the other way around.”

The Cox-Charter Merger Presents No Public Interest Harms

Second, whereas the transaction offers clear competitive and consumer benefits as described above, it presents no countervailing public interest harms. Significantly, there is limited to even no overlap between the companies’ respective mass market service territories. As Mercatus Center Senior Research Fellow and former Federal Trade Commission General Counsel.

Alden Abbott noted, “Charter and Cox largely operate broadband services in distinct territories. Charter serves 41 states, focusing primarily on suburban and urban markets, while Cox’s footprint is largely concentrated in areas that Charter hardly services, such as Arizona, Kansas, Oklahoma, and the City of Las Vegas. This geographic separation indicates the merger will not eliminate direct competition.”²

Accordingly, combining Charter’s operating strategy with Cox’s business- to-business acumen promises to increase – not decrease – competition as it enables a more efficient combined company to offer expanded investment and innovation to customers, and therefore stronger products and services at affordable prices across more markets.

The Cox-Charter Merger Will Deliver for American Workers

Third, the transaction will put America’s workers first – another critical public interest benefit.

As one illustration, Charter’s existing implementation of a 100% U.S.-based sales and customer service workforce will be extended to Cox, returning jobs from overseas. The combined companies’ employees will earn at least $20 per hour and receive a comprehensive benefits package, including full medical, dental, and vision coverage, a robust 401(k) match and paid time off for full and part-time employees.

Further, as outlined in the application, Charter and Cox have numerous programs in place to help America’s veterans, National Guard personnel, reservists and military spouses. A combined company would preserve and expand those offerings.

Finally, a combined company that brings together a larger pool of skilled employees, communications infrastructure and critical equipment across a broader geographic area will strengthen American public safety with a more robust and resilient network – a public interest benefit for the country.

For each of these reasons, we strongly support the proposed merger between Charter and Cox, which aligns with longstanding public interest standards and promotes the core principles of free-market competition. By combining complementary networks with virtually no service overlap, the merger will enhance consumer choice, lower costs through greater efficiencies and deliver higher-quality service — without reducing competition. The merger will also return customer service jobs to the U.S., provide robust wages and benefits for American workers, support veterans and military families and strengthen
our communications infrastructure to better serve public safety.

We urge the FCC to approve this pro-consumer, pro-worker, pro- competition transaction.

Respectfully submitted,

Jeffrey Mazzella President
Center for Individual Freedom

James Erwin
Executive Director Digital Liberty

Phil Kerpen

President
American Commitment

Patrice Onwuka
Director, Center for Economic Opportunity
Independent Women

Robert Romano

Executive Director
Americans for Limited Government

Bartlett D. Cleland

Executive Director
Innovation Economy Institute

Grover Norquist

President
Americans for Tax Reform

Andrew Langer

President
Institute for Liberty

Ryan Ellis

President
Center for a Free Economy

Tom Giovanetti

President
Institute for Policy Innovation

Tom Schatz

President
Citizens Against Government Waste

Charles Sauer
Founder and President
The Market Institute

Ashley Baker
Executive Director
The Committee for Justice

Brandon Arnold
Executive Vice President

National Taxpayers Union

Jessica Melugin
Director, Center for Technology and Innovation
Competitive Enterprise Institute

Karen Kerrigan

President & CEO
Small Business & Entrepreneurship Council

Matthew Kandrach

President
Consumer Action for a Strong Economy

David Williams

President
Taxpayers Protection Alliance