US clears huge cable operator merger, with conditions

US authorities on Monday approved a mega-merger of cable television operators that allows Charter Communications to absorb rivals Time Warner Cable and Bright House Networks, with some conditions.

Charter agreed to pay more than $78 billion for TWC and $10.4 billion for Bright House, making it the second largest US cable television operator behind Comcast, and the second largest cable Internet group.

The approval comes after last year's deal between Comcast and TWC fell apart in the face of opposition from antitrust officials.

The US Justice Department asked a federal court to approve the deal, which requires the companies to refrain from actions that would harm competition in the television and video markets.

Federal Communications Commission chairman Tom Wheeler said the conditions would "ensure a competitive video marketplace and increase broadband deployment."

The plan calls for the "New Charter" company to increase deployment of high-speed Internet services and bars the firm from charging usage-based prices or imposing data caps or interconnection fees.

The conditions aim to prevent the big cable and Internet operator, which will have more than 20 million customers, from blocking rivals in online video such as Netflix or Hulu.

"Online video distributors offer consumers greater choices for video services," said Principal Deputy Assistant Attorney General Renata Hesse, head of the Antitrust Division.

"This merger would have threatened competition by increasing the merged company's leverage to demand that programmers limit their licensing to these online providers," she added.

"Together with our counterparts at the FCC, we have secured comprehensive relief and we will work together to closely monitor compliance to ensure that New Charter will not have the power to choke off this important source of disruptive competition and deny consumers the benefits of innovation and new services."

An independent monitor will be appointed to ensure that the new firm lives up to the agreement.

The consolidation comes with the cable TV industry seeking to adapt to a shift of viewing habits to online media such as Netflix and Hulu, which allow people to watch on demand.

Although the number of cable "cord cutters" has been relatively modest in recent years, analysts expect this trend to accelerate, which could have a significant impact on the television industry.

Some activists groups argued the new mega-deal is bad for consumers.

"There's nothing about this massive merger that serves the public interest," said Craig Aaron of the consumer activist group Free Press.

"Customers of the newly merged entity will be socked with higher prices as Charter attempts to pay off the nearly $27 billion debt load it took on to finance this deal," he added.

"The wasted expense of this merger is staggering. For the money Charter spent to make this happen it could have built new competitive broadband options for tens of millions of people."