Deny the Comcast merger, don’t try to fix it with conditions urges CPUC ratepayer advocates

by Steve Blum • , , , ,

If it’s that broke, trash it.

Comments are coming thick and fast regarding the proposed decision by a California Public Utilities Commission (CPUC) administrative law judge to approve, with conditions, the mega-merger and market swap between Comcast, Time-Warner and Charter Communications. I’m still working my way through the stack – the CPUC posted the documents yesterday – but one of the filings, from the CPUC’s office of ratepayer advocates (ORA) jumps out.

As it has all along, ORA is urging outright rejection of the transactions…

As the [proposed decision (PD)] correctly concludes, the Joint Applicants [i.e. Comcast, Time-Warner, Charter and Bright House] have failed to show by a preponderance of the evidence that they are entitled to approval of this merger. That is the legal standard and that failure should be the end of the matter. Beyond that, as the PD also correctly establishes, ORA and the other interested parties have shown the substantial harm to competition and customers that will continue and be exacerbated by the merger.

A laundry list of conditions not proposed by the Joint Applicants and not available for comment or analysis prior to the release of the PD have been proposed to offset the Joint Applicants’ failure. However, these conditions do not ameliorate the substantial harm to competition that will occur if the merger is approved. Moreover, approval of the proposed merger would send a signal that no matter how deficient an applicant’s showing or how great the harm identified, the CPUC will likely approve the application.

I think ORA has hit the nail on the head. It’s better to prevent harm than to allow it and try to make it less painful by imposing mostly temporary conditions.

There’s more back and forth to come, and the five CPUC commissioners will have the last word. That could happen as soon as a couple of weeks from now, but it could take longer.