CPUC steps in front of Comcast train, asserts authority over California broadband

by Steve Blum • , , ,

Rejecting Comcast’s and Time-Warner’s claim that the California Public Utilities Commission can only consider a narrow set of largely technical questions regarding their proposed merger, a CPUC administrative law judge ruled yesterday that the commission can evaluate – and approve or disapprove – aspects of the merger on the basis of a wide range of public interest issues.

The ruling tracks closely with protests filed by advocacy groups and the commission’s office of ratepayer advocates. Comcast and Time-Warner now have a long list of questions to answer. At a top level, commission wants to know whether the terms of the merger would…

Be beneficial on an overall basis to state and local economies, and to the communities in the area served by the resulting public utility…

Provide mitigation measures to prevent significant adverse consequences which may result.

Specific questions for the companies include…

What are the implications of the Merger for broadband deployment in California including, in particular, deployment of broadband to elementary and secondary schools and classrooms and to unserved and underserved areas of the State?…

Would the Merger, which is planned as a nationwide transaction, have specific or different effects in California? For example, would the merger result in less competition in the California marketplace for broadband customers as compared to broadband customers nationally?

And there’s more.

In making the ruling, the administrative law judge agreed that federal law gives the CPUC authority to look at the impact of the merger on broadband access and adoption in California…

The Commission is seeking information under the limited authority granted by state and federal law and protecting the public interest to promote state and federal goals, such as encouraging broadband deployment, promoting safety and furthering “innovation, consumer choice and protection, and economic benefits to California.”

Although the CPUC believes it can demand that Comcast and Time-Warner answer its questions, there are limits on what it can do with the information. It has the ability to throw a wrench in the works by refusing to allow Comcast to take over Time-Warner’s CPUC-regulated businesses in California, but that’s not likely enough to kill the deal altogether. The CPUC also plans to submit the information it gathers – and the conclusions it reaches – to the FCC which, along with the federal justice department, has the cosmic authority to say yea or nay.

Comcast and Time-Warner have until 1 October 2014 to deliver answers. Still to be determined is whether the second half of the mega-deal – Comcast’s market swap with Charter – will get rolled into this process as well.