CPUC should follow New York’s lead, hold Charter to obligations

by Steve Blum • , , ,

The California Public Utilities Commission imposed a long list of obligations on Charter Communications, when it granted permission for the purchase of Californian cable systems belonging to Time Warner and Bright House in 2016. Some of those requirements mirror the conditions that the New York Public Services Commission attached to its approval of the deal.

Unlike the NYPSC, however, the CPUC has not demanded public accountability from Charter. New York regulators nipped at Charter’s heels since the acquisition closed, and then revoked permission and ordered Charter to reverse the sale and give up its New York markets because “the company was not interested in being a good corporate citizen”.

Typically, the CPUC does not take an active role in enforcing conditions attached to telecoms deals. The job of being the cop on the beat is often left up to outside organisations. If you want a particularly vivid example of how that approach does or doesn’t work, take a look at the mess surrounding Frontier Communications’ purchase of Verizon’s wireline phone systems in California in 2016.

Although it’s arguably right to expect outside parties to take responsibility for enforcing their own contracts, there’s little reason to think they’ll take on the additional work of policing the CPUC’s own decisions. For example, when it approved the Time Warner purchase, the CPUC gave Charter two and a half years – until November 2018 – to convert its legacy TV-only analog systems to digital service…

Within 30 months of the closing of the Transaction, New Charter shall convert all households in its California service territory to an all-digital platform with download speeds of not less than 60 Mbps…

On December 31, 2016 and every year thereafter until December 31, 2019 New Charter shall submit a progress report to the Commission and [the CPUC’s office of ratepayer advocates] identifying progress made.

In theory, the CPUC has some idea already as to whether or not Charter is performing. It’ll be a relatively straight forward process to confirm that all of Charter’s analog systems in the San Joaquin Valley, and in Modoc and Monterey counties, have been upgraded to digital service come November. The CPUC should be as proactive in enforcing its own decisions and pursuing the public interest as its New York colleagues.