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CEI Appeals Unlawful Conditions FCC Imposed on Cable Provider Merger

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The Competitive Enterprise Institute (CEI) and four individuals – John France, Daniel Frank, Jean-Claude Gruffat, and Charles Haywood – filed an appeal today with the United States Court of Appeals for the District of Columbia Circuit, seeking to overturn unlawful conditions imposed by the Federal Communications Commission (FCC) on a merger between three major U.S. cable companies.

In 2015, Charter, Time Warner Cable, and Bright House Networks announced a merger and applied to the FCC to transfer various licenses and authorizations to New Charter, the new entity resulting from the merger. That same year, the FCC announced it was seeking public comment on the transaction and, in response, CEI filed comments. Months later in 2016, the FCC approved the companies’ applications, but unlawfully imposed various conditions the agency claimed were necessary to “yield net public interest benefits.” Then-Commissioner Ajit Pai, who has since been elevated to FCC Chairman, issued a dissent describing the conditions imposed as politically-motivated “extortion” and warned the decision failed to explain how the conditions would address any potential harm caused by the license transfers.

CEI and the four individuals filed a reconsideration petition with the FCC in June of 2016, but the Commission failed to respond within the 90-day statutory deadline. In response to the missed deadline, CEI petitioned the D.C. Circuit Court of Appeals, asking the court to order the FCC to respond. Over two years after that filing and one week before the court hearing, the FCC finally acted, denying CEI’s petition. The agency’s order claimed CEI did not specifically object to the merger conditions in its comments on the transaction—despite the fact that the FCC’s notice of comment failed to mention any conditions—and also said that CEI and the four individual appellants lacked standing.

“We agree with now-Chairman Pai that the conditions the FCC imposed on the New Charter transaction are politically-motivated extortion. Throughout this process, the FCC has either failed to live up to its statutory obligations or exceeded its statutory authority—our hope is that the court will hold them accountable,” said CEI Senior Attorney Melissa Holyoak. “The court should reject the FCC’s attempt to use the merger process to push its central planning agenda.” 

You can read the filing here.

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