US FCC limits broadband competition

The U.S. Federal Communications Commission is reversing a requirement imposed that Charter Communications extend broadband service to a million households already served by a competitor.

The requirement was made under the Obama administration to make sure that the telcos competed with each other rather than setting up local monopolies.

It was part of a condition of approval for its acquisition of two cable companies, Charter had agreed in May 2016 to extend high-speed internet access to 2 million customers within five years, with 1 million served by a broadband competitor.

FCC chairman Ajit Pai in a statement said the move was like telling two people you will buy them lunch, ordering two entrees, and then sending both to just one of your companions.

“It runs directly against the goal of promoting greater internet access for all Americans.”

The American Cable Association petitioned the FCC to reverse the requirement in 2016.

The group warned it would have “devastating effects on the smaller broadband providers Charter will overbuild” because they would face competition from an “uneconomic, government mandated entry” that could put some companies out of business.

But equally it could create a situation where cable companies divide up regions to get local monopolies.