Dish's Opposition to Charter/TWC/BHN Revolves Around Sling TV Competitive Worries

Dish Network, which opposes regulatory OK of Charter Communications' buy of Bright House Network and Time Warner Cable, probably is hoping not so much to derail the $89.1 billion deals -- as the company maintains -- but to have conditions that would advantage its Sling TV online video distribution service, said several experts, including those skeptical of such transaction curbs. "The louder [Dish CEO Charlie Ergen] is, the more influence he has in what those conditions might be," Boston College Law School associate professor Daniel Lyons said. And Dish on Comcast/TWC was joined by Cogent and Netflix in trying to block that deal outright, noted a cable lawyer. Dish seemingly is trying to have conditions imposed on the deal beyond those voluntarily proposed, such as deeper commitments that last longer, the attorney said.

However, Dish's foremost goal is blocking the mergers, not imposing conditions, even though it has suggested some, Dish Deputy Counsel Jeffrey Blum said. Conditions “are hard to enforce, they’re vague,” he told us Tuesday

In recent weeks, Dish submitted to the FCC a litany of oppositions to Charter/TWC/BHN, raising red flags about such things as the possibility of New Charter acting in coordination with Comcast in the high-speed Internet market (see 1511230031), the inevitability of usage-based pricing by New Charter (see 1512140027), and arguing BHN was going to upgrade its residential broadband offering independently of any Charter merger (see 1511300049). In a filing posted Monday in docket 15-149, Dish said that despite Charter's assertions, TWC already planned to finalize its digital transition independently of the merger. "Such upgrades cannot therefore be claimed as benefits of the proposed merger with Charter," Dish said in the highly redacted filing. TWC didn't comment.

In a statement, Charter said Dish opposition "is puzzling as there is no more OVD-friendly broadband provider than Charter. We offer the fastest minimum broadband speed in the industry at 60 Mbps, with no data caps, no usage based billing, no modem fees and no [exchange-traded funds]. One would think that Dish, like industry leader Netflix, would strongly support our transactions which will create an even better platform for OVDs including Sling.”

One ally of Dish said its opposition reflects what it has said in its public statements -- that there's no public interest upside for approving Charter/TWC/BHN and that creation of another larger player in the broadband market creates questions about market balance and access for numerous services beyond just Sling TV.

Sling TV subscribers “don’t need Charter or Time Warner [video], they just need broadband, and that’s the rub,” Blum said. “New Charter controls the pipe and they have the incentive to sabotage Sling TV.” In its petition to deny, Dish said if the FCC does approve the deals, it would need to impose a variety of conditions such as a guaranteed offering of stand-alone broadband. That stands in contrast to Comcast/TWC, when Dish didn’t suggest any possible conditions as a fallback.

Since Dish doesn't offer voice or Internet service, "the way they're trying to avoid irrelevance" is moving to an OVD-centric business model with Sling, and thus is concerned about the growing concentration of the broadband market that would come with New Charter, Lyons said. "The real concern is the combined entity will have too much market power in the broadband space," which is also what the FCC's review undoubtedly is focusing on, he said. There also has been some speculation that Dish fears such company consolidation means fewer possible deal opportunities for it, though that motivation for Dish's opposition seems less likely, he said.