Charter-Time Warner deal gets tentative OK in California

by Steve Blum • , , ,

Broadband counts.

Charter Communication’s purchase of Time Warner and Bright House cable systems in California should be approved if the company sticks to promises that it has made and to agreements it has reached with parties that previously opposed the deal. That’s the draft decision offered by Karl Bemesderfer, an administrative law judge with the California Public Utilities Commission.

Bemesderfer’s proposed decision will go to a vote of the full commission next month. In it, he says that the deal does have some negatives – greater market concentration, for example – but Charter’s promised upgrades and changes to the way it does business makes up for it…

Weighing Charter’s commitments to increased Internet speeds, increased numbers of wireless access points, less onerous contracts, more effective competition in the enterprise space, unbundling of services, equal treatment of content providers and greater diversity in hiring, contracting and programming, all of which will be made explicit conditions of approval of the Transaction, against the increase in concentration of the market for broadband Internet access without the threat of discrimination against competing content creators, we conclude that the benefits of the Transaction outweigh its drawbacks and the Transaction satisfies [the section of the public utilities code that says that such deals must “be beneficial on an overall basis to state and local economies, and to the communities in areas served by the utility”].

The conditions include specifically upgrading Charter’s analog video-only system in the City of Gonzales, and those in the rest of the Salinas Valley, to full digital capabilities, as well as other upgrades and line extensions elsewhere in California. Charter would also install 25,000 WiFi hotspots around the state. Other conditions include free service to a relative handful of public agencies and/or non-profits, and $32.5 million over five years to the California Emerging Technology Fund, primarily for digital literacy and broadband marketing programs.

Proposed decision of ALJ Karl Bemesderfer, 12 April 2016

I’m assisting the City of Gonzales with its efforts at the CPUC and its negotiations with Charter. I am not a disinterested commentator. Take it for what it’s worth.