Charter won’t compete against cable firms because it might buy them later

(credit: Cole Marshall)

When Charter purchased Time Warner Cable and Bright House Networks, federal regulators forced the company to agree to some conditions designed to boost competition in the Internet service market. Charter, now the nation's second largest cable company behind Comcast because of the merger, is required to bring broadband of at least 60Mbps to at least 1 million homes and businesses where there's already a provider offering at least 25Mbps.

This is known as "overbuilding," something that happens infrequently enough that many Americans have only one choice for high-speed Internet. But when Charter fulfills the overbuilding requirement imposed by the Federal Communications Commission, it'll apparently do so without actually competing against other cable companies. Instead, Charter will enter the territory of phone companies like AT&T or Frontier, Charter CEO Tom Rutledge said.

Why is that? Because Charter might want to buy more cable companies later. And the FCC is less likely to approve a merger between two companies competing against each other.

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