Upcoming Meeting on California PUC's Comcast/TWC Review Seen Important to Outcome
A Wednesday all-party meeting on the California Public Utilities Commission Comcast/Time Warner Cable deal review is likely to be crucial in determining the outcome of the CPUC review, industry lawyers and public interest advocates said in interviews. CPUC Administrative Law Judge Karl Bemesderfer released a draft decision on Comcast/TWC Feb. 13 that recommends the CPUC approve the deal with significant conditions (see 1502170059). The CPUC scheduled the meeting for 2 p.m. PST at its headquarters in San Francisco before Bemesderfer’s release of the draft decision.
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The conference will be an opportunity for Comcast and state public interest advocates to “put their best case forward on the deal before the commissioners,” Greenlining Institute Telecom Policy Director Stephanie Chen said. “We’ll see if any commissioners’ opinions change after. It may, it may not.” The meeting also is likely to get attention from the FCC and New York Public Service Commission, which are reviewing Comcast/TWC and are watching how the CPUC’s review progresses, said an industry lawyer who’s been following state regulators’ reviews of the deal but isn’t involved in the review.
Comcast and public interest advocates appear likely to push back against elements of the draft decision, the industry lawyer said. Public interest advocates indicated the draft decision contains one of the strongest sets of deal conditions they’ve seen the CPUC produce. They still believe the draft decision should have denied the deal outright given the FCC’s recent decision to raise the standard for determining whether broadband is being sufficiently deployed to 25 Mbps download and 3 Mbps upload (see 1501290043).
The Utility Reform Network (TURN) was slightly surprised that the draft decision didn’t recommend rejection of Comcast/TWC following the FCC’s 25/3 decision, Telecom Director Regina Costa said. The speed threshold increase makes it “very clear that Comcast would have a monopoly in a great deal of the country and about 80 percent of the market in California if this merger goes through, and that’s a pretty compelling argument to reject it,” Costa said. “However, we are glad to see that the concerns of the interveners are reflected in the draft decision. I don’t think I’ve ever seen a stronger or more thorough set of conditions proposed for a merger.” The draft contains some “pretty serious conditions,” Chen said. “This is some very activist stuff in the conditions here, so we are happy to see that.”
The CPUC may vote on Comcast/TWC as early as its March 26 meeting, and would be able to vote on either the draft decision or any alternate decisions proposed by the offices of CPUC commissioners other than Commissioner Carla Peterman, Chen said. Bemesderfer issued the draft decision on behalf of Peterman, the commissioner assigned to lead the CPUC’s Comcast/TWC review. The CPUC must wait 30 days from the issuance of a draft decision before voting, meaning the window is rapidly closing for other commissioners to issue an alternate decision that recommends denying Comcast/TWC before the March 26 meeting, Chen said. If there's no alternative to the draft decision, a CPUC vote against the draft decision would mean “there’s no resolution by the commission and they have to go back and take another crack at it,” an industry lawyer said. It’ll be clearer after the Feb. 25 meeting whether another commissioner will issue an alternate decision, said Media Alliance Executive Director Tracy Rosenberg. “I think there’s no doubt that the other commissioners will have serious and sustained questions about the proposed decision,” she said.
The CPUC consulted with Comcast and all other parties before issuing the draft decision, but that doesn’t mean Comcast has agreed to the conditions, the industry lawyer said. Comcast is “reviewing the decision and preparing our response which will be filed on March 5,” a spokeswoman said. Comcast Executive Vice President David Cohen said in a blog post Feb. 13 that the company “can work with” some of the conditions, but has concerns about others. Some proposed conditions “could potentially prevent the full benefits of this transaction being realized by Californians, and create a more intrusive regulatory regime where innovative services could be hampered rather than helped,” Cohen said. “At least some of the suggested conditions simply lie outside the authority of the CPUC or are unrealistic.” He said that includes a requirement that Comcast sign up at least 45 percent of all California households eligible for Comcast’s Internet Essentials low-cost broadband program post-merger within two years unless the company can show that penetration rates for eligible customers is less than 45 percent.