Google Fiber says no settlement, CPUC to decide protest of Webpass deal


Big or small?

Google Fiber won’t agree to a settlement with the only group to lodge a protest in California to its acquisition of Webpass, an independent Internet service provider. The deal requires approval from the California Public Utilities Commission because Webpass is certified as a competitive telecoms company, which makes it a regulated public utility.

This sort of review is usually routine. Exceptions are generally the result of past problems with CPUC rules – not an issue in this case – or occur when the companies involved are major players in California’s telecoms ecosystem. Charter Communications’ successful purchase of Time Warner and Comcast’s failed attempt to do much the same are two recent examples. Webpass and Google Fiber do not play in that league and neither the CPUC’s office of ratepayer advocates or any of the usual outside “intervenors” – organisations that make a living by protesting or otherwise getting directly involved in proceedings – raised any concerns about the transaction.

Except one. The National Diversity Coalition – an umbrella group that includes more than a dozen minority-focused organisations – challenged Google’s purchase of Webpass and called for a deeper investigation into whether the deal serves the public interest, and in particular how it would affect the communities it claims to represent. It is a standard tactic and is often used to extract concessions from the companies involved, sometimes for benefits that flow to the general public – Charter’s obligation to upgrade broadband service in redlined areas is an example – but also sometimes for payments or other perks that go directly to the intervenors themselves.

NDC’s argument boils down to Google is a big company, so it should get the full treatment. As is standard procedure in these cases, the two sides held settlement talks, but judging from the statement Google filed with the CPUC last week, NDC wanted a truckload of data regarding finances, corporate policy and practices and other matters that companies usually consider to be proprietary. All in an effort, Google said, “to extract various conditions and commitments from [Google and Webpass] wholly unrelated to the limited transaction before the CPUC”.

So instead of agreeing to NDC’s demands in exchange for it dropping its protest, Google is kicking the decision back to the CPUC administrative law judge and commissioner who are assigned to the case. A conference is scheduled for Wednesday morning in San Francisco.

I assisted the City of Gonzales in its challenge to Charter at the CPUC and its subsequent and successful negotiations. I am not a disinterested commentator. Take it for what it’s worth.