Charter Gets a Little Help From Its Friends In Bid to Raise Fees

(Bloomberg) -- Charter Communications Inc. has won support from an unlikely roster of organizations as it seeks permission to increase fees for customers that use a lot of data.

The Boys & Girls Club of Harlem, for example.

The New York youth organization is among scores of civic and local-business groups that have received charitable donations from the company, and have reciprocated by filing statements on Charter’s behalf with the U.S. Federal Communications Commission. Others include a non-profit theater in Honolulu, civil rights organizers in Los Angeles, an African America museum in South Dallas, and a car dealership in Eau Claire, Wisconsin.

“They’re a supporter of us. We support them,” Dominique Jones, executive director of the Harlem youth club, said in an interview.

The groups say the nation’s second-largest cable provider has won their support by being a good source of jobs and philanthropy in their communities. In its July 15 filing, the Boys & Girls club said it is “happy to support Charter” and mentioned a $35,000 grant it received to help with computer literacy.

Charter’s petition to the FCC asks for freedom to charge subscribers more for high data consumption, as well as to demand fees from online video providers such as Netflix Inc. The company agreed in 2016 not to do that for at least seven years when it won the FCC’s approval for a $55 billion acquisition of Time Warner Cable Inc.

The deal catapulted Stamford, Connecticut-based Charter from a regional player to a colossus with customers in New York and Los Angeles. Charter wants to be released from the conditions next May, at the five-year mark of its merger, rather than waiting until 2023.

Opponents say charging extra would be doubly self-serving: deterring the streaming of video from Netflix and other companies, and shunting viewers toward Charter’s in-house offerings. Charter calls the change a housekeeping measure and says it has no plans to impose the changes on customers but wants the freedom to adjust in a market that can change rapidly.

Corporate Battle

The use of community groups to burnish a campaign isn’t uncommon in Washington, where corporations wage battles for the ear -- and sympathy -- of regulators.

When asked by Bloomberg News about a letter filed July 20, the Niagara Falls Boys & Girls club, which got $5,000 from Charter for a summer camp, backed away from its support for the measure Charter is seeking from the FCC.

The letter the club submitted was prepared by Charter and “upon closer review, the last paragraph of the letter states that we support” Charter’s request, Rebecca Vincheski, chief executive officer of the club, said in an email.

The club has “a position of neutrality on this important community issue,” Vincheski said.

Enterprise Florida, the state’s main business development group, wrote to call for “full and fair consideration” of Charter’s request. In the filing, President Jamal Sowell cited 8,000 Charter workers in Florida, and grants from the company of $57,500 to groups including non-profits working on digital literacy.

Florida Governor

Enterprise Florida’s chairman is Ron DeSantis, the state’s Republican governor. Charter gave his political action committee, Friends of Ron DeSantis, contributions of $25,000 on June 13, 2019, and $25,000 on Dec. 11, 2019, according to Florida state’s online records. Enterprise Florida didn’t respond to emailed questions.

Competitors and consumer groups have urged the FCC to reject Charter’s request.

“Promises made must be promises kept,” said Chip Pickering, chief executive officer of the Incompas trade group, whose members include Netflix, Amazon.com Inc. and Facebook Inc. “Charter has the power to slow, throttle and stifle new creative content from online and streaming choices.”

An advocacy group called Stop the Cap! that focuses on broadband issues has campaigned on line against Charter’s request, and it said more than 700 people wrote the FCC insisting the company not get its way. “We are VERY disappointed in nonprofit groups receiving $ and equipment from Charter Spectrum that turn around and lobby the FCC in favor of data caps,” Stop the Cap! tweeted.

Changed Circumstances

Charter’s June 17 petition seeking the changes cited changed circumstances. It pointed out a trend of recent years: appetite for online mini-series and movies is flourishing, while cable providers suffer a steady exodus of video customers. Online services are “thriving and growing at an unprecedented rate,” showing they don’t need the protections afforded by the conditions, the company said.

Other TV providers have data caps and can charge for connecting to their networks, without ill effect on consumers, Charter said in its petition.

“We wanted to put ourselves, from an opportunity perspective, on the same even playing field as all of our competitors,” Charter Chief Executive Officer Tom Rutledge told investors on July 31. “But we don’t have any change in business strategy or marketing strategy or product strategy as a result.”

There’s been another change, too: the FCC now is led by Chairman Ajit Pai -- a Republican who voted against the merger to express his distaste for the restrictions written by Democrats who were running the FCC in 2016.

The agency took comments on the issue through Aug. 6. FCC spokeswoman Anne Veigle declined to comment.

Charter is grateful for the comments submitted on its behalf to the FCC, Avery Boggs, a spokeswoman for the company, said in an emailed statement.

“Our business is inherently local and we are committed to improving the communities we serve and impacting lives where our customers and employees live and work,” Boggs said. “These efforts include long-term relationships with local leaders and philanthropies.”

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