Universal service might be the one good reason for the CPUC to replace Charter with Comcast

by Steve Blum • , , , ,

One condition could make all the difference for the proposed decision in front of the California Public Utilities Commission that would formally approve the pending mega merger and market swap between Comcast, Time-Warner and Charter. The way the decision reads now, it would impose 25 different conditions on the deal, ranging from rates that can be charged for particular telephone and broadband services, to budgets for marketing to low income households, to requirements for battery backups. The CPUC’s authority to impose many of those requirements is debatable and its ability to enforce them is tenuous.

But some of the conditions are on firmer ground, particularly a broadband build out requirement…

Comcast shall, within 24 months of the effective date of the parent company merger, upgrade facilities to make broadband services available in all California households where [Comcast, Time-Warner, Charter and Bright House] currently provide only video service.

When the FCC imposed a very limited set of common carrier rules on Internet service and infrastructure, it left the door open a crack to universal service requirements, which traditionally have been managed at both the state and federal level. So there’s a plausible argument that the CPUC gained explicit authority to tell Comcast if it wants control of 84% or more of Californian homes, then it has to serve them all.

That’s important for cities like Gonzales in the Salinas Valley, where Charter never upgraded analog cable systems. In the Salinas Valley alone, a hundred thousand people in some of California’s poorest communities have been redlined out of the digital age. A preliminary analysis by the Central Coast Broadband Consortium points to the conclusion that they are not alone. The CPUC’s own map data indicates that even bigger swaths of Los Angeles, San Bernardino, Tulare and Kern counties fall below Charter’s red line. The analysis isn’t finished yet (full disclosure: I’m part of that effort), but the picture so far is bleak.

The City of Gonzales filed a request regarding Comcast’s plan to take over those systems, asking – successfully so far – for the CPUC’s help

The City of Gonzales requests the California Public Utilities Commission condition the pending action…by requiring analog cable systems to be upgraded to digital systems as part of this or any action before the commission.

There are many good arguments for rejecting the deal altogether, including the likelihood that the wish list of 25 conditions will have little more effect than a letter to Santa. But the build out requirement could stick, and it’s hard to look at the communities that Charter has abandoned throughout California and say we’re going to kill your best hope of joining the 21st century. If CPUC commissioners say no – and I still think they should – they will have an obligation to use the new universal broadband service authority granted by the FCC to end broadband redlining by monopolies they now regulate.