February 25, 2016 / 5:55 PM / 2 years ago

Democratic senators raise concerns about Charter-Time Warner Cable tie-up

(Reuters) - Five Democratic U.S. senators, including presidential candidate Bernie Sanders, told the Justice Department and Federal Communications Commission on Thursday that they had “significant concerns” about Charter Communications Inc’s (CHTR.O) planned acquisition of Time Warner Cable Inc TWC.N and Bright House Networks.

The senators, who also included Elizabeth Warren, Ed Markey, Ron Wyden and Al Franken, said in a letter to the agencies that are reviewing the proposal that the deal would create “a nationwide broadband duopoly,” with Charter and Comcast Corp (CMCSA.O) in nearly two-thirds of U.S. high-speed broadband homes.

The senators urged the government to thoroughly address all potential harm to consumers.

They also raised concerns that Charter will take on significant debt that could harm its ability to honor commitments to build out its network, including in rural areas.

The FCC has said U.S. broadband prices are among the world’s most expensive, according to the senators, who urged more competition.

The merger could lead to higher prices and fewer innovative services, they added.

Charter said in May that it would buy Time Warner Cable in a $56 billion cash-and-stock deal that would make it the No. 2 U.S. Internet and cable company after Comcast.

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Shareholders of both companies and most U.S. states have approved the deal, which still awaits clearance from the federal government.

On Wednesday, Charter said it had won approval from New Jersey and was only awaiting clearance from two states where it will operate as New Charter.

The company agreed to return Time Warner Cable call centers to the United States and add jobs.

    “Having demonstrated that the pending transactions with Time Warner Cable and Bright House Networks are squarely in the public interest, Charter remains confident they will close in a timely fashion,” the company said on Wednesday.

    New Charter would be the third-largest cable provider in the country, serving roughly 17.3 million customers, and the second-largest broadband provider, with 19.4 million subscribers. It would be in nearly 40 states.

    Charter and Time Warner Cable did not immediately respond to requests for comment on Thursday. FCC spokeswoman Kim Hart said the commission had received the letter and was reviewing it.

    The FCC hopes to complete its review by the end of March.

    In April, Comcast withdrew its $45 billion offer for Time Warner Cable after U.S. regulators raised concerns that the deal would give it an unfair advantage in the cable TV and Internet-based services market.

    Reporting by David Shepardson; Editing by Lisa Von Ahn

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