CPUC commissioner urges rejection of Comcast's California merger plans

13 April 2015 by Steve Blum
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It’s a new game.

The California Public Utilities Commission will formally consider denying Comcast’s proposed takeover of Time Warner and Charter cable systems in the state. Until now, the conversation has been guided by a tentative decision drafted by a CPUC administrative law judge that would approve the merger and market swap, with a long list of temporary conditions. On Friday, commissioner Mike Florio proposed an alternative decision that would reject the deal outright…

Certain material facts are beyond serious dispute: the merger will roughly double Comcast’s share of broadband subscribers in California, leaving it with several times more broadband customers than all its competitors combined; Comcast’s market dominance is even more dramatic if the market is defined as broadband above 25 Mbps; and given this substantial increase in market share, Comcast will have a concomitant increase in control over Californians’ access to online content and services…

Comcast and Time Warner each have an effective monopoly on providing broadband services within its local geographic area…a post-merger Comcast will have a monopoly on speed tiers of 25 Mbps and above in approximately 78 percent of California census blocks, with only one competitor in almost all the rest. Merger of the parent companies creates a single company that is capable of serving over 84 percent of the homes in California…

[The conditions proposed by the administrative law judge] appear difficult to enforce, and even if fully implemented, could last for five years at most. We find that conditions that only temporarily or incompletely mitigate identified harms to the public interest are not sufficient to offset those harms.

Florio’s draft wraps up by saying “no conditions could mitigate all of the negative impacts of the proposed transaction” and simply denies it.

The CPUC has scheduled a public meeting in Los Angeles on Wednesday, where Comcast and its dance partners will face off against opponents of the deal as well as groups hoping to benefit from the conditions originally proposed. At least two commissioners – Carla Peterman and Catherine Sandoval – will be there. Florio and the others may as well. It’s their answer to Comcast’s suggestion that they should work everything out behind closed doors.

For now, there are two possible outcomes on the table: approval of the deal with temporary conditions or outright rejection. It won’t be decided on Wednesday, but it might be Comcast’s last chance to make its case. Ultimately, the five commissioners will vote on which alternative they want to take.