Charter 2013 Annual Report Download - page 38

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Risks Related to Regulatory and Legislative Matters
Our business is subject to extensive governmental legislation and regulation, which could adversely affect our business.
Regulation of the cable industry has increased cable operators' operational and administrative expenses and limited their revenues.
Cable operators are subject to various laws and regulations including those covering the following:
• the provisioning and marketing of cable equipment and compatibility with new digital technologies;
• subscriber and employee privacy and data security;
• limited rate regulation of video service;
• copyright royalties for retransmitting broadcast signals;
• when a cable system must carry a particular broadcast station and when it must first obtain retransmission consent to
carry a broadcast station;
• the provision of channel capacity to unaffiliated commercial leased access programmers;
• limitations on our ability to enter into exclusive agreements with multiple dwelling unit complexes and control our inside
wiring;
• the provision of high-speed Internet service, including net neutrality rules;
• the provision of voice communications;
• cable franchise renewals and transfers;
• equal employment opportunity, emergency alert systems, disability access, technical standards, marketing practices,
customer service, and consumer protection; and
• approval for mergers and acquisitions often accompanied by the imposition of restrictions and requirements on an
applicant's business in order to secure approval of the proposed transaction.
Additionally, many aspects of these laws and regulations are currently the subject of judicial proceedings and administrative or
legislative proposals. There are also ongoing efforts to amend or expand the federal, state, and local regulation of some of the
services offered over our cable systems, which may compound the regulatory risks we already face, and proposals that might make
it easier for our employees to unionize. Congress and various federal agencies are now considering adoption of significant new
privacy restrictions, including new restrictions on the use of personal and profiling information for behavioral advertising. In
response to recent global data breaches, malicious activity and cyber threats, as well as the general increasing concerns regarding
the protection of consumers’ personal information, Congress is considering the adoption of new data security and cybersecurity
legislation that could result in additional network and information security requirements for our business. In the event of a data
breach or cyber attack, these new laws, as well as existing legal and regulatory obligations, could require significant expenditures
to remedy any such breach or attack.
Our cable system franchises are subject to non-renewal or termination. The failure to renew a franchise in one or more key
markets could adversely affect our business.
Our cable systems generally operate pursuant to franchises, permits, and similar authorizations issued by a state or local
governmental authority controlling the public rights-of-way. Many franchises establish comprehensive facilities and service
requirements, as well as specific customer service standards and monetary penalties for non-compliance. In many cases, franchises
are terminable if the franchisee fails to comply with significant provisions set forth in the franchise agreement governing system
operations. Franchises are generally granted for fixed terms and must be periodically renewed. Franchising authorities may resist
granting a renewal if either past performance or the prospective operating proposal is considered inadequate. Franchise authorities
often demand concessions or other commitments as a condition to renewal. In some instances, local franchises have not been
renewed at expiration, and we have operated and are operating under either temporary operating agreements or without a franchise
while negotiating renewal terms with the local franchising authorities.
The traditional cable franchising regime has recently undergone significant change as a result of various federal and state actions.
Some state franchising laws do not allow us to immediately opt into favorable statewide franchising. In many cases, state
franchising laws will result in fewer franchise imposed requirements for our competitors who are new entrants than for us, until
we are able to opt into the applicable state franchise.
We cannot assure you that we will be able to comply with all significant provisions of our franchise agreements and certain of our
franchisers have from time to time alleged that we have not complied with these agreements. Additionally, although historically
we have renewed our franchises without incurring significant costs, we cannot assure you that we will be able to renew, or to
renew as favorably, our franchises in the future. A termination of or a sustained failure to renew a franchise in one or more key
markets could adversely affect our business in the affected geographic area.