The Federal Communications Commission’s Net Neutrality rules took full effect Friday, after a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit denied petitions for a temporary stay of the rules made in separate lawsuits by AT&T and other telecom industry opponents.

“This is a huge victory for Internet consumers and innovators!,” FCC Chairman Thomas Wheeler exclaimed in a written statement. “There will be a referee on the field to keep the Internet fast, fair and open. Blocking, throttling, pay-for-priority fast lanes and other efforts to come between consumers and the Internet are now things of the past. The rules also give broadband providers the certainty and economic incentive to build fast and competitive broadband networks.”

The Net Neutrality rules govern both wired and wireless Internet services, and most observers predict the biggest impact will be felt by wireless customers. Wireless providers have experimented with speed throttling, priority access, data caps, and so-called “sponsored data” exempt from usage caps or usage billing. Some of these practices are now illegal under Net Neutrality rules and others are subject to increased scrutiny by the FCC.

Providers generally have not opposed rules blocking online censorship, paid prioritization, and selective speed throttling, but they are vehemently against the FCC’s catch-all “Internet general conduct rule,” that effectively allows the agency to oversee issues like interconnection agreements that connect content producers with each ISP, data caps/usage billing, and issues like zero-rating — providing an exemption from an ISP’s usage allowance for preferred content partners.

Providers argue the FCC could block innovative pricing and usage-based billing they argue customers would like to have.

Other industry groups claim Net Neutrality will lead to a significant decline in investments towards broadband upgrades and expansion. But Charter Communications CEO Thomas Rutledge, now in the middle of a multi-billion dollar merger deal with Time Warner Cable and Bright House Networks, disagreed, noting it will have no effect on Charter’s investment plans for its own cable systems or those it may acquire.

“The big news today is that there is no news,” said Timothy Karr, senior director of strategy for Free Press. “With Net Neutrality protections in place, there are no dramatic changes to the way the Internet works. Internet users are logging onto a network that’s open, as they’ve long expected it to be.”

Rutledge

Despite claims from Net Neutrality critics that increased oversight of the broadband business would lead to reduced investment and upgrades, Charter Communications CEO Thomas Rutledge said the new rules would have no effect on Charter’s investment plans.

Last week Rutledge sat down with FCC chairman Thomas Wheeler to discuss Charter’s proposed merger with Bright House Networks and Time Warner Cable. He was joined by Catherine Bohigian, Charter’s executive vice president for governmental affairs and FCC general counsel Jonathan Sallet and senior counselor Phil Verveer.

“Mr. Rutledge explained that the transactions will bring substantial consumer benefits, including providing a better Internet experience for watching on-line video, gaming, and using other data-hungry apps at more competitive prices, and that the mergers will not harm competition,” according to a one page filing with the FCC disclosing the meeting.

Despite repeated claims from pro-industry policy wonks that Net Neutrality and Title II oversight of cable broadband would cause operators to reconsider their investment plans, Rutledge made it clear Charter’s spending plans are unaffected.

“Mr. Rutledge agreed that the Commission’s decision to reclassify broadband Internet access under Title II has not altered Charter’s approach of investing significantly in its network to deliver cutting edge services including: the fastest entry-level broadband service (60 Mbps) with unlimited usage; out-of-home Wi-Fi hotspots; a state-of-the art, cloud-based user guide, allowing search and discovery across linear, video on demand and online content; open, non-proprietary downloadable security; and an innovative video app with hundreds of live and downloadable channels and the ability to display over-the-top content seamlessly on the television,” the disclosure continues.

Charter’s chief executive said the company supports Open Internet rules, including no throttles or blocks on lawful content and no paid prioritization. But he does worry about regulatory uncertainty while the FCC explores its expanded powers of oversight.

Editor’s Note: This editorial in the St. Louis Post-Dispatch is reprinted in its entirety. It comes from a newspaper that has covered Charter Communications since its inception. The Post-Dispatch reporters are also some of Charter’s subscribers — the cable company serves all of metropolitan St. Louis. Charter has never been received particularly well in St. Louis and in other cities where it provides generally mediocre service. Communities across Missouri that have endured poor cable and broadband service have recently taken a serious look at doing something about this by building their own public broadband networks as an alternative. But big money telecom interests, especially AT&T, have found it considerably less expensive to lobby to ban these networks from ever getting off the ground than spending the money to upgrade networks to compete.

On May 15, the last day of this year’s session of the Missouri Legislature, House Bill 437 finally was assigned to a committee, where it promptly died. Given the power of the American Legislative Exchange Council, it may well be back next year.

HB 437, sponsored by Rep. Rocky Miller, R-Lake Ozark, was full of gobbledygook about “municipal competitive services,” but its effect would have been to condemn Missourians to ever-higher prices for broadband Internet service. Cities would have been forbidden from establishing their own broadband services to compete with private operators, thus holding down prices.

ALEC, which wines and dines state lawmakers and then gets them to pass pro-business “model legislation” in their states, had succeeded in getting restrictions on public Internet providers in 20 states. But in February, the Federal Communications Commission struck down North Carolina’s ALEC-inspired law, so the future of other such laws is uncertain.

About 22 percent of Missourians are still regarded as “underserved,” having no reliable access to broadband service of at least 25 megabits per second — what’s needed to stream video without lags. About 1 in 6 Missourians have only one wired access provider to choose from. More than 400,000 Missourians have no wired broadband at all.

Missouri is ranked 38th “most connected” in the nation by the federal-state Broadband Now initiative. In the 21st century, this is like being underserved by railroads in the 19th century or power lines in the early 20th. In parts of rural Missouri, it’s hard to do business, which helps explain why HB 437 died in committee.

Rep. Rocky Miller (R-Lake Ozark)

The basic question is whether companies that invest in high-speed Internet infrastructure should be able to charge whatever they can get away with, or whether broadband service should be treated as a public utility. If it’s the latter, as the FCC determined in February, then government must make sure it’s affordable.

Which brings us to Charter Communications proposed $56 billion takeover of Time Warner Cable and its $10.4 billion acquisition of Bright House Networks. Both deals were announced May 26; both will need approval from the FCC and the Justice Department’s antitrust regulators.

In St. Louis, we have a love-hate relationship with Charter, a homegrown company built atop what was once Cencom Cable. It has dominated the cable TV market here almost as long as there’s been a cable market.

Charter customers endured years of poor service, its bankruptcy, its legal challenges, its ownership and management changes. Just when it got itself together, in 2012, the headquarters was moved from Des Peres to Stamford, Conn., though it retains a significant presence here.

Today our little Charter is a big fish; the Time Warner and Bright House deals would make it the nation’s second-largest cable company, with 24 million customers, behind only Philadelphia-based Comcast, with 27 million.

But cable TV no longer drives cable TV. Internet-based video services, like YouTube and Netflix, have revolutionized the way people, particularly younger people, watch TV. When cable companies first started connecting customers to the Internet through the same cables that delivered TV programming, it was regarded as a nice add-on business. Now broadband delivery is seen as a far bigger part of the future than providing TV programs.

Indeed, when Comcast tried to acquire Time Warner last year, the dominance (nearly 60 percent of the market) that the combined company would have had over broadband service caused federal regulators to look askance. Comcast abandoned its bid in April.

By contrast, a Charter-Time Warner-Bright House combination (it will do business as Spectrum) will control 30 percent of the broadband market. Charter Spectrum will have 20 million broadband subscribers, compared with 22 million for Comcast.

So what can customers expect? Charter’s CEO Tom Rutledge has promised “faster Internet speeds, state-of-the-art video experiences and fully featured voice products, at highly competitive prices.”

This begs the question, competitive with whom? Comcast? Mom-and-pop operations that can’t afford the infrastructure? Municipal service providers who are being ALEC’d out of business?

Neither Charter nor Time Warner has particularly good customer service ratings (though to be fair, Charter is miles ahead of where it used to be, at least in St. Louis). Still, Charter will take on lots of debt to finance the deal, much of it in high-yield junk bonds. The broadband business provides leverage. As analyst Craig Moffett of MoffettNathanson told the Wall Street Journal: “Broadband pricing is almost an insurance policy for cable operators, in that if all else fails, you’ve always got the option to raise broadband rates.”

America wouldn’t let a private operator own 30 percent of its roads and highways. It wouldn’t allow two of them to control half the electricity. If broadband Internet service is a public utility, it must be regulated strictly.

The lesson is old as the hills: The free-marketeers who talk most passionately about competition are generally in the business of trying to eliminate it. Charter and Time Warner are both members of ALEC.

The Charter-Time Warner deal clearly is not in the public interest. The upside for shareholders is huge. The upside for Charter executives is even bigger. But it’s hard to see how Charter’s customers would see much benefit at all.

While consumer groups were busy fighting the Comcast-Time Warner Cable merger, AT&T’s $49 billion purchase of DirecTV has largely flown under the radar, with no comparable organized consumer opposition to the deal. But that does not mean the FCC will approve it as-is.

Negotiations with federal regulators and an exchange of regulatory filings and comments between AT&T, the FCC, and deal critics have apparently forced AT&T to agree to several concessions to make regulators amenable to approving the transaction.

The Washington Post reports that chief among those concessions is AT&T’s willingness to voluntarily abide by certain Net Neutrality rules regardless of any court challenges, including banning the slowing or blocking of websites and agreeing not to accept payments from website operators to speed up their content. AT&T has not said how long it intends to keep that commitment.

Deal opponents are also seeking other concessions from AT&T:

No paid interconnection deals: AT&T must route incoming content to customers without any fees charged to the companies originating the traffic. This became a hot button issue when Netflix felt it was forced to pay Comcast a fee to assure its streamed video content would reach Comcast customers without buffering or other errors. AT&T is expected to fiercely oppose this condition and says it should have the right to make private deals with content delivery firms.

AT&T must offer standalone broadband: With AT&T’s acquisition of DirecTV, more than ever it will have an incentive to sell customers a television bundle with Internet service. Regulators want AT&T to assure broadband-only service remains readily available. AT&T has offered 6Mbps DSL for $34.95 a month as its standalone option. Content delivery firms like Cogent want AT&T to offer 25Mbps service in all of AT&T’s markets for $29.95 a month for at least seven years. The FCC recently defined 25Mbps the minimum speed to qualify as broadband.

No end runs around Net Neutrality with data caps and exemptions: AT&T wants the right to exempt its preferred partners from its usage caps and claims that is beneficial to consumers. But cap opponents claim that is simply another way to collect money from content companies for preferential treatment — an end run around Net Neutrality rules. Opponents of these cap exemptions, known as “zero-rating” claim all content should be treated the same. AT&T could resolve this by removing data caps from its DSL and U-verse services altogether.

Marcus

Even as some of the largest investment banks on Wall Street are assembling a $24 billion loan package to further Charter Communication’s next effort to acquire Time Warner Cable, CEO Robert Marcus has learned not to take his eyes off the day-to-day business of running the country’s second largest cable operator.

Marcus turned up late last week at Le Parker Meridien in New York to speak at the 2nd Annual MoffettNathanson Media & Communications Summit, largely an affair putting Wall Street investors together with top cable executives to learn about industry trends.

Immediately peppered with questions about the failed merger between Time Warner and Comcast, Marcus sought to turn the page on the deal that would have handed him an $80 million golden parachute.

“The horse is dead,” Marcus said in response to continued questions about the deal.

But Marcus did say he felt the deal was rejected for reasons that were never explained to him or the industry, which could have an impact on future cable mergers and acquisitions. Regulator-inspired uncertainty could make some companies think twice about pursuing the next big deal, but so far that does not seem to apply to Charter Communications — still hot on the trail for a deal with the much larger Time Warner Cable.

Marcus claims he understood Time Warner Cable’s image with customers was a real problem that needed to be addressed immediately after becoming the company’s new CEO in  January 2014.

“The residential business was where the work needed to be done,” said Marcus.

Reliability became the top priority for Marcus’ team.

“It trumped features and functionality,” Marcus said, noting that if its network performed as it should, that would result in fewer calls into its customer care centers and reduced “truck rolls” to customer homes, saving Time Warner Cable time and money and improving its image. Marcus claims those efforts paid off.

“It works, we’re not pixelating, and we don’t have [huge] outages,” Marcus said.

Under Marcus’ leadership, Time Warner has adopted a “non-sexy stuff” approach to the cable business, focusing on making sure its existing products work before jumping into new products. That may explain why Time Warner has traditionally been behind other operators introducing vast broadband speed increases, cloud-based set-top boxes with improved user interfaces, more TV Everywhere contract arrangements allowing Time Warner customers to access online video content from third-party cable network websites, and the largest on-demand video libraries.

Not much is likely to change for the time being. Marcus reiterated his plan for major network upgrades under his Time Warner Cable Maxx program remain on track to reach 75% of Time Warner Cable service areas by the end of 2016.

When Maxx upgrades are complete, customers are transitioned to an all-digital television platform and Standard broadband customers move from 15/1Mbps service to 50/5Mbps at no additional charge. Although the top speed for Time Warner Cable broadband is currently 300/20Mbps in Maxx markets like New York, Los Angeles, Austin and Kansas City, Marcus said he was ready to bring 1Gbps broadband to Time Warner Cable customers sometime in late 2016, after DOCSIS 3.1 equipment becomes available.

“As the market evolves to that place, we’ll make it available,” Marcus said.

Recent movement at the Federal Communications Commission to introduce additional oversight over the cable industry has not made much impact at Time Warner Cable, which plans business as usual.

“I live in a different world than Chairman Wheeler in terms of the competitive dynamic,” Marcus said. “We’re fighting it out everyday in the trenches to gain and keep High Speed Data subscribers. The idea we would pull back and not press any competitive advantages of product enhancements we’re capable of delivering, just feels counter-intuitive and bad business.”

The idea that policy changes in Washington would somehow impact the investment in and introduction of new and better services from Time Warner Cable was ridiculous to Marcus.

“I cannot translate that into holding back the product and I can’t imagine what the policy objective would be that would encourage holding back the product,” Marcus said.