CPUC Revises Conditional OK of Charter/TWC/BHN Ahead of Thursday Vote

Charter declined to comment on the revisions to the proposed order. Last week, the company agreed to the California conditions proposed April 12 by an administrative law judge, and sought clarifications of the language of the order (see 1605040040), including a condition on net neutrality. A green light by the CPUC is the last OK needed by the company. The FCC approved the deals Friday (see 1605060059), releasing the order text and commissioner statements Tuesday (see 1605100050).

The revised proposal includes new enforcement language. Commission staff and ORA would have authority to audit and verify compliance, and Charter will provide all data requested by either body, it said. "If New Charter fails to perform and comply with the conditions imposed by this decision, the Commission may pursue appropriate enforcement remedies, including the imposition of fines."

The revision added three conditions and edited others. Within three years of the deals' closing, Charter must deliver at least 100 Mbps broadband speeds to all homes in its service area, one condition said, subject to completion of deployment of 70,000 new broadband connections to current analog-only cable service areas in Kern, Kings, Modoc, Monterey, San Bernardino and Tulare counties -- language already in the proposed order. By Dec. 31, 2019, Charter must offer at least 300 Mbps download speeds to all households it currently offers broadband to in California, a second condition said. For three years after closing, Charter must allow existing TWC and BHN customers to retain their current broadband subscriptions, a third said. The CPUC also made minor clarifications to the language of conditions on set-top boxes, Lifeline discounts, voice service quality and consumer information about backup power.

The CPUC didn’t edit a proposed condition requiring Charter to comply with the FCC’s Open Internet Order – regardless of the outcome of any legal challenge. The condition also says that for at least three years Charter must not adopt fees for users to use specific third-party Internet applications, won't engage in zero rating or usage-based billing and won't impose data caps. In comments, Charter asked the CPUC to clarify that the three-year sunset also applies to the first sentence about compliance with the Open Internet Order. But in reply comments, ORA said the data cap and usage-based billing requirements should stand “until there is effective competition in Southern California, or no shorter than seven years after the decision is issued, whichever is later.” Stop the Cap agreed, saying the condition “should not be severely limited to a three year period,” especially because TWC has committed to forever refrain from these practices.

“The [proposed decision] changes are insufficient to mitigate the harms that the merger will likely cause, especially in Southern California,” Ana Maria Johnson, ORA program and project supervisor-communications and water policy, said Wednesday. In particular, the changes fail to reference conditions that Charter accepted in its reply briefs related to keeping up service quality and customer satisfaction, she said. “These conditions are necessary to properly monitor that Charter is meeting its obligations to deliver state-wide reliable service.” Also, ORA opposes the three-year sunset on the CPUC’s net neutrality condition, she said.

Stop the Cap is disappointed by the revised proposed order, President Phillip Dampier said in an emailed statement. “By window-dressing what is essentially Charter's own voluntary offer to the CPUC, the commission is continuing to miss a golden opportunity to win deal conditions that will meaningfully benefit Californian consumers that will otherwise get little more than higher cable and broadband bills,” he said. “Virtually everything Charter is promising customers is already available or soon will be from Time Warner Cable, often for less money. Time Warner Cable committed to offering its customers 300 Mbps speeds, no usage caps or usage billing, and all-digital service through its Maxx upgrade program, expected to be complete by the end of 2017 or 2018. The CPUC is proposing to allow New Charter to wait until 2019 to provide 300 Mbps service and potentially cap Internet service three years after that, four years less than what the FCC is demanding.”

The National Diversity Coalition supported approval of the deal, saying the FCC addressed its concerns about diverse programming and minority broadband access. “We are confident that the CPUC will also find the benefits of this transaction for the minority community to be compelling, and approve the application,” the coalition said in reply comments. The deal is good for low-income consumers, adding another affordable broadband adoption like those offered by AT&T, Comcast and Frontier, the California Emerging Technology Fund said. “CETF urges the Commission to find that the New Charter offer is an important public benefit, adding significantly to the mix of offers for low-income consumers in the Golden State in the coming years.”

The proposed Charter order is item 20 on the CPUC’s agenda for Thursday’s meeting, which starts at 9:30 a.m. PDT and will be webcast.