Bad telecoms regulatory decisions won’t be saved by non-existent good will

by Steve Blum • , , , ,

The game isn’t over when the California Public Utilities Commission votes to impose conditions on big mergers. Telecoms companies will immediately challenge decisions, administratively and in court, and try to wriggle out of obligations by any means possible.

Comcast is doing that now in Vermont, where that state’s public utilities commission required it to build out 550 miles of line extensions into rural areas. According to an article by Jon Brodkin in Ars Technica

The company’s court complaint says that Vermont is exceeding its authority under the federal Cable Act while also violating state law and Comcast’s constitutional rights…

Comcast’s complaint also objected to several other requirements in the permit, including “unreasonable demands” for upgrades to local public, educational, and governmental (PEG) access channels and the building of “institutional networks (“I-Nets”) to local governmental and educational entities upon request and on non-market based terms”…

Comcast often refuses to extend its network to customers outside its existing service area unless the customers pay for Comcast’s construction costs, which can be tens of thousands of dollars.

When faced with demands for conditions or concessions, Comcast is particularly stroppy – rather than negotiate, it mounted a smash mouth campaign against opposition to its failed bid to do a massive three-way merger/market swap deal with Charter and Time Warner in 2015.

Other companies, that are all sweetness and light while trying to convince regulators to okay their deals, can also turn nasty once the ink has dried. For example, Frontier Communications was represented by friendly, knowledgable telecoms professionals while it sought, and received, CPUC permission to buy Verizon’s wireline telephone systems in California. But within a few months of the sale closing, those key frontline people disappeared from public view, either fired as the company downsized or relegated to back rooms. They were replaced by litigious lobbyists who engage in scorched earth opposition to any project, program or requirement that doesn’t suit their business model.

Likewise, CenturyLink is spinning a handful of feeble promises into epic concessions as it seeks CPUC permission to buy Level 3 Communications. But the actual agreement is stuffed with weasel words and CenturyLink has consistently played hardball with both opponents and the commission. There’s no reason to think it’ll be any less aggressive in pursuing its interests if and when it’s a done deal. That’s a fact of life that the CPUC would do well to consider as it grinds its way through its review.