Netflix to support Charter's bid for TWC, Bright House in exchange for free network use

Charter Communications (NASDAQ: CHTR) has gained a powerful ally in its bid to acquire both Time Warner Cable (NYSE: TWC) and Bright House Networks: In a new filing with the FCC, Netflix agreed to support Charter's purchase of TWC and Bright House in exchange for free usage of Charter's network through 2018.

In its own filing with the FCC, Charter laid out its interconnection policy. "Part of Charter's model has been to employ a settlement-free Internet interconnection policy, which has been in place for a number of years," Charter wrote. "Charter hereby commits to maintain this settlement-free policy until December 31, 2018."

Specifically, Charter said it won't charge any online video company to stream content over its network more efficiently until at least Dec. 31, 2018.

That position garnered the support of Netflix.

"Netflix's long-standing support for an open interconnection policy is designed to ensure that consumers get the online content they want at the broadband speeds they pay for. Charter's new peering policy is a welcome and significant departure from the efforts of some ISPs to collect excess tolls to the Internet," Christopher Libertelli, VP of global public policy at Netflix, wrote in the company's FCC filing. "Charter's policy will promote efficient interconnection with online content providers and with the transit and content delivery services that smaller online content providers rely on to reach their customers. Charter's endorsement of the policy as an enforceable merger condition will ensure that consumers will receive the fast connection speeds they expect."

"This new policy and the commitment to apply it across the 'New Charter' footprint is a substantial public-interest benefit and will support scaling the Internet to meet consumers' growing demand for online services and help foster continued innovation across the Internet ecosystem," Libertelli added in explaining Netflix's support for Charter's transaction.

Netflix reluctantly signed peering deals with Comcast (NASDAQ: CMCSA) and Time Warner Cable before becoming a powerful voice of dissent in during the regulatory review process of those two cable companies' failed merger.  

Charter is aggressively seeking to distance itself from the net neutrality-related concerns that plagued Comcast in the run-up to its failed bid for TWC. Earlier, Charter executives said they would go above and beyond the FCC's new net neutrality requirements if their deal closes. 

For more:
- read this FCC filing from Netflix
- read this FCC filing from Charter Communications
- read this Bloomberg story

Related links:
Charter says it will 'go further' than net neutrality for merger approval
FCC starts review of Charter's TWC and Bright House deals
Charter gets support from Bounce TV founder for TWC, Bright House deals

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