Charter/TWC/BHN To Close Next Week After CPUC Votes 5-0 on Conditional OK
Charter Communications snagged its last-needed regulatory OK for its $90 billion buys of Bright House Networks and Time Warner Cable, with the California Public Utilities Commission shining the green light Thursday. At a live-streamed meeting in Sacramento, the five CPUC commissioners voted unanimously in favor of a conditional OK. CPUC President Michael Picker said the transactions satisfy requirements of the public utilities code and are in the public interest, and consumer advocates attending the meeting said it’s a good deal for underserved communities.
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“We are pleased to have now obtained all approvals,” Charter CEO Tom Rutledge said in a statement. “We look forward to closing these transactions next week and to begin delivering the many benefits of these transactions to consumers.” The FCC signed off on the deals last week (see 1605060059), releasing Tuesday the order text and commissioner statements including their concerns (see 1605100050).
The CPUC released the text of the proposed order ahead of the meeting (see 1605110049), adding enforcement language and a few broadband upgrade conditions to an administrative law judge proposal released April 12 (see 1604130020). The order included memoranda of agreement with the California Emerging Technology Fund (CETF) and the National Diversity Council, plus agreements with the city of Gonzales and Monterey County. The Office of Ratepayer Advocates (ORA) and consumer group Stop the Cap slammed the proposed order Wednesday for not imposing more and stronger conditions on Charter. But at the Thursday CPUC meeting, commissions agreed to only one change: a revision requested by Charter and opposed by ORA and Stop the Cap. The amendment, proposed by Picker and supported by the other commissioners, clarified that a condition requiring Charter to comply with the FCC’s net neutrality order -- even if it’s overturned in court -- will apply for only three years. The ORA and Stop the Cap opposed that change, saying three years wasn’t long enough.
The commission has crafted “a thoughtful and well-reasoned proposed decision in this complex and important case,” Commissioner Michel Florio said. “With these conditions, I believe that the transaction supports the public interest and provides benefits to the people of California. I expect New Charter to live up to its commitments and to remain a good corporate citizen in California well beyond the term of the specific conditions.” Florio applauded conditions to extend Lifeline phone service discounts, provide high-speed Internet access to thousands of customers who currently lack broadband connections, offer low-cost broadband access to qualifying households and ensure that current TWC pricing remains available to existing customers. Other commissioners also highlighted conditions aimed at underserved communities in California.
Commissioner Carla Peterman highlighted differences with the failed Comcast/TWC from last year. Charter’s “willingness to work with the parties as well as some differences in the competitive position brought forward in this merger make it remarkably different” from the Comcast deal, she said. The CPUC is a nonpartisan agency. The order's final text won’t be available for a few days, a CPUC spokeswoman said.
Several consumer advocates supported approval in a public comments session before the vote, saying the deal would benefit minorities, low-income families, rural communities, LGBT and other underserved communities. Sunne McPeak, president of the CETF, said the order “provides extraordinary public benefits in both broadband deployment to unserved households … and to low-income and disadvantaged communities.” Others in the audience disputed Charter’s commitment to minorities given a pending $10 billion racial discrimination lawsuit against Charter in U.S. District Court in Los Angeles (see 1601280063).
“There are absolutely no black members of Charter’s board,” said a disabled veteran who brought up the case. The veteran also said the deal “excludes people with disabilities,” and Charter’s commitment to low-income families is a “farce” because it’s just taking over lines to people already served by TWC. Picker said later that the Charter memo of understanding with the National Diversity Coalition includes requirements that the company increase diversity of its board and create a chief diversity officer.
Stop the Cap is “profoundly disappointed” in the CPUC, emailed President Phillip Dampier. “We saw clear evidence of a commission more concerned about Charter Communications and Time Warner Cable than the average citizens of California that will face higher cable bills, time limits on unlimited Internet access, and a longer wait for upgrades as a direct result of today's decision.”