U.S. FCC Reverses Charter Communications 'Overbuild' Requirement

The U.S. Federal Communications Commission has voted to reverse a requirement imposed under the Obama administration that Charter Communications Inc extend broadband service to 1 million households already served by a competitor, the commission said on Monday. The decision was a win for a group representing smaller cable companies that petitioned to overturn the "overbuild" requirement and marked the latest reversal of Obama-era requirements by the new Republican-led FCC under President Donald Trump.

As a condition of approval for its acquisition of two cable companies, Charter in May 2016 agreed to extend high-speed internet access to 2 million customers within five years, with 1 million served by a broadband competitor. Under the revised FCC order expected to be made public on Monday, Charter must add service to 2 million additional potential subscribers in places without existing service, FCC spokesman Mark Wigfield said.

The American Cable Association petitioned the FCC to reverse the requirement in 2016 and has met with FCC commissioners in recent weeks. The group previously called the requirement under then FCC chairman Tom Wheeler "stunningly bad and inexplicable government policy" and warned it would have "devastating effects on the smaller broadband providers Charter will overbuild" because they would face competition from an "uneconomic, government mandated entry" which could put some companies out of business.

A former top aide to Wheeler, Gigi Sohn, said on Monday, the "latest move by the Trump FCC demonstrates once again that broadband competition is nowhere on its agenda. From its efforts to weaken privacy and net neutrality, to its decision refusing to designate new Lifeline providers to its pending order that would preserve a duopoly for broadband data services, the Trump FCC once again puts incumbents first."

Supporters say the move ensures that more people without access to high-speed broadband, especially in some rural and urban areas, will have an option.

Wheeler said last year the requirement as part of Charter's acquisition of Time Warner Cable and Bright House Networks would spur competition "bringing innovation and new choices for consumers, and demonstrate the viability of one broadband provider overbuilding another."

A Charter spokeswoman declined to comment. Charter is the second-largest U.S. cable company with 26 million residential and business customers in 41 states.

Charter Chief Executive Tom Rutledge met with Trump at the White House last month to tout the company's investment and hiring plans.

(Reporting by David Shepardson; Editing by Chizu Nomiyama and Meredith Mazzilli)