Broadband is on CPUC’s short list for review of Charter deal

by Steve Blum • , , , ,

Charter bundles broadband. Why shouldn’t the CPUC?

The cost and availability of broadband in California will be a key factor in determining whether Charter Communications is allowed to buy Time Warner’s and Bright House Networks’ cable systems. That was the decision on Friday by the president of the California Public Utilities Commission, Michael Picker, as he set out the criteria and the schedule for deciding if the transaction will be approved.

On the surface, it is a far less ambitious review than the CPUC undertook of the now dead Comcast mega-merger and market swap with Time Warner and Charter. The commission began that process more than a year ago, in August 2014, with a long punch list of issues to consider, and wrapped it up in July after federal regulators killed the deal.

This time around, Picker kept the list of issues brief…

a. Does the Transaction meet some or all of the criteria enumerated in [section 854(c) of the public utilities code]?

b. How will the Transaction affect broadband deployment and/or affordability? and

c. Is the proposed change of control in the public interest?

d. Are there any implications for public safety from the transaction?

Section 854(c) sets out eight criteria, including benefits to the economy at both state and local levels, that determine whether the transaction is in the public interest. Picker’s roadmap for Charter is vague enough that it doesn’t preclude consideration of the same items in the Comcast review, but aside from broadband and public safety issues, it doesn’t particularly include them either.

Where it strikingly differs, though, is in its assertion of authority. The CPUC started the Comcast review with the bold assumption that federal telecoms law grants it considerable discretion in reviewing anything to do with encouraging broadband competition or infrastructure deployment. That assumption was never put to a full vote of the commission, so it’s still untested.

Picker didn’t revisit the question for the Charter proceeding. Instead, he pointed to Charter’s own application, which touted, in Picker’s words, “the many alleged benefits of the Transaction, specifically including its alleged beneficial implications for broadband deployment and affordability” as reasons the deal meets public interest requirements. In other words, broadband is on the table because Charter put it there.

Whether that logic holds through the CPUC’s lengthy review process remains to be seen, but it does track with the reasoning behind a recently proposed CPUC decision that would allow Frontier Communications buy Verizon’s wireline telephone systems in California.

The schedule that Picker set calls for a decision to be made on the Charter deal by next June.

I’m assisting the City of Gonzales with its effort to upgrade broadband service via the CPUC’s review of the Charter-Time Warner-Bright House deal. I am not a disinterested commentator. Take it for what it’s worth.