Charter 2015 Annual Report Download - page 18

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the transactions. We have raised or received commitments for all of the acquisition financing, and we will be operationally ready
to close upon obtaining regulatory approvals. We expect the closing to occur in the second quarter of 2016 subject to regulatory
approval and other closing conditions.
Transaction-Related Commitments
In connection with the regulatory approval process before the FCC, Charter has made commitments regarding the following items:
• Investments within four years of closing the TWC Transaction and Bright House Transaction
Invest at least $2.5 billion in the build-out of networks into commercial areas
Build one million line extensions to homes in the franchise areas of New Charter
Deploy over 300,000 out-of-home WiFi access points
• Internet and interconnection
Comply with the open Internet rules that prohibit blocking, throttling, and paid prioritization for three years
from the closing of the TWC Transaction and Bright House Transaction without regard to the outcome of ongoing
litigation regarding FCC’s open Internet rules
Maintain a settlement-free interconnection policy until December 31, 2018
Refrain from instituting usage-based pricing for Internet service for three years from the closing of the TWC
Transaction and Bright House Transaction
Offer 30 Mbps high-speed Internet service to households with children in notional free and reduced school lunch
programs and to seniors 65 years of age and older who are on social security supplemental income
• Product and operations
Transition TWC’s and Bright House’s networks to all-digital within 30 months of closing and enable at least 60
Mbps download speeds for New Charter’s Internet service and improve the video product by adding HD and
on-demand options
Consistent packaging and pricing strategy to be transitioned to Charter’s current model within 12 months of
closing for TWC and Bright House markets that are already all-digital at closing; same offering for all other
areas once those systems have been converted to all-digital
Continue to insource call center and field technician jobs, including returning TWC call center jobs to the U.S.
With respect to the settlement-free interconnection policy (the “Policy”), Charter committed to the FCC to enter into an agreement
to exchange Internet traffic with any entity providing content to Charter customers. The material terms of Charter’s obligations
are: (1) to enter into an interconnection contract with an applicant meeting the technical criteria specified in Charter’s peering
policy; (2) not to charge the interconnecting party money for exchanging Internet traffic pursuant to that contract; (3) to upgrade
interconnection capacity with the interconnecting party within 90 days after a certain traffic threshold is met; and (4) to maintain
interconnection contracts entered into pursuant to the Policy until at least December 31, 2018. If a party enters into an
interconnection contract with Charter pursuant to the Policy, that party’s obligations include several items that assist Charter and
the interconnecting party in transmitting traffic on a settlement-free basis efficiently across the interconnected networks including:
(1) not to charge Charter money for exchanging Internet traffic; (2) to interconnect at each of the Charter points of presence listed
in the Policy and at any additional Charter point of presence within 90 days of its establishment; (3) to maintain a minimum traffic
exchange of 3 Gbps (95th percentile) at each Charter point of presence in the dominant direction as measured on a monthly basis;
(4) to deliver traffic to the Charter point of presence closest to the location at which the corresponding Internet customer traffic
terminates; (5) to label the data traffic in ways that assist Charter in efficiently managing its network; and (6) to upgrade
interconnection capacity with Charter within 90 days after a certain traffic threshold is met. Charter may also suspend an
interconnection arrangement in certain circumstances including security reasons or if the interconnecting party sends traffic in
excess of certain maximums based on the growth in the traffic of the interconnecting party. Charter may choose to extend the
Policy and the interconnection agreements under the Policy but does not have any current plans whether to extend the Policy or
the underlying agreements. Under the open Internet rules adopted by the FCC, the FCC has determined that interconnection
arrangements are subject to oversight under a “just and reasonable” standard and that the FCC will consider the reasonableness
of Internet traffic exchange arrangements on a case by case basis. Charter believes its interconnection policy is fully consistent
with the FCC open Internet rules although the FCC may choose to assess Charter’s interconnection policy or interconnection
agreements pursuant to the open Internet rules.
In connection with New York’s approval of the TWC Transaction, Charter has also agreed to certain commitments to New York
including commitments regarding low-income broadband offerings as referenced above, maintaining existing TWC low price
service offerings for new customers for a period of two years after closing and for existing customers for a period of three years,
building our networks to serve 145,000 currently unserved or underserved households or businesses in New Charter’s New York
footprint, enhancing broadband speeds, maintaining certain New York customer facing jobs and investing in and enhancing