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Charter new peering policy wins Netflix support for its TWC takeover

Charter Communications has gained an influential supporter in its effort to win regulatory approval of its takeover of Time Warner Cable and Bright House Networks.  Netflix Wednesday told the Federal Communications Commission that Charter’s new peering policy is “a substantial public interest benefit” especially if it is extended to the Time Warner Cable and Bright House service areas.

Charter recently tweaked its interconnection policy and promised the FCC that it would provide settlement-free Internet interconnections to qualifying content/long haul providers through December 2018.

Netflix’s CEO Reed Hastings would also like to see the Charter policy applied as a condition to regulatory approval of the AT&T-DirecTV deal. “It would be great from our perspective, if this condition proposed by Charter were applied to AT&T-DirecTV,“ Hastings said during the company’s second quarter earnings call.

Per the revised policy, Charter will interconnect its IP network at no charge with content providers who provide a certain level of traffic. Interconnection and any subsequent capacity increases for the exchange of traffic would be at no charge to either party. Under the policy, each party would agree to maintain sufficient capacity to support Charter customer-initiated Internet sessions.

“Charter’s new peering policy is a welcome and significant departure from the efforts of some ISPs to collect access tolls on the Internet,” Netflix’s ex parte reads.

Both the Netflix letter endorsing Charter peering policy and the Charter letter to the FCC committing to the policy through December 2018 were dated and delivered electronically on July 15.

Netflix’s fierce opposition to the Comcast merger with Time Warner Cable is widely believed to have significantly influenced the FCC to oppose agreement, leading to the breakup of that takeover.

In its letter to shareholders for the second quarter of 2015, Netflix was effusive in it praise of Charter’s peering policy commitment.

“Charter Communications made net neutrality history today by committing to open and free interconnection across the Charter/TWC network, if their pending merger is approved. This move ensures that all online video providers can aggressively compete for consumers’ favor, without selective and increasing fees paid to ISPs. Charter’s interconnection policy is the right way to scale the Internet. It means consumer will receive the fast connection speeds they expect. The Charter/TWC transaction, with this condition, would deliver significant public interest benefits to broadband consumers, and we urge its timely approval.”