Comcast Welcomes Merger Nod from PUC Judge, but Not Rules Against Ignoring the Poor

Tuesday, February 17, 2015
(graphic: Steve Straehley, AllGov)

The Comcast/Time Warner merger express make a whistle stop in California just long enough to pick up a tentative OK and some unwelcome baggage it hopes to quickly shed.

An administrative law judge for California’s Public Utilities Commission (PUC) recommended (pdf) last week that the commission approve a proposed $45-billion merger between the nation’s two largest—and most despised—cable companies. The state is involved because Time Warner would have to transfer state and local contracts to Comcast, although the federal government has the final say. 

While the company hailed the “important step” in the regulatory process and looked forward to dealing directly with the commission, it was not enamored of the suggested conditions attached to the approval by the judge.

Essentially, the conditions are an order that Comcast fix a laundry list of problems that critics and the company’s Internet customers have complained about for a decade. Many of them have to do with providing better broadband service to poorer communities, but Judge Karl Bemesderfer also wants faster speeds across the service territory, better customer service (no labeling customers “assholes” and “whores” on their bills), protection of customer privacy, free backup batteries for the asking (addressing VoIP and 911 issues) and more accessibility for the disabled.

Comcast also wouldn’t be able to oppose municipalities from setting up their own broadband networks for five years and must give the commission copies of all the complaints it gets from Californians about their service.     

Comcast Executive Vice President and Chief Diversity Officer David L. Cohen responded to the judge’s decision by assuring everyone that “a number of the conditions are ones the company can work with.” Others “create a more intrusive regulatory regime . . . or simply lie outside the authority of the CPUC.”

Specifically, Cohen said the company has a problem with goals the judge set for “deeper broadband penetration among all populations.” That would include “populations that have been slowest to adopt broadband,” i.e. lower-income people.    

As Ars Technica points out, there are already programs in place that require broadband providers to offer deep discounts to poor and disabled people, but Comcast does an effective job of limiting participation by potential customers. Judge Bemesderfer wants the eligibility for one such program, Internet Essentials, expanded, its complexity reduced and the speeds it offers doubled.

He also wants the onerous wait to get in the program reduced and overall participation by eligible residents to improve from 11% to 45% in two years. The judge wrote:

“While Comcast has committed to offer Internet Essentials to qualifying customers acquired from Time Warner as a result of the merger, it has made no promises regarding expanded IE eligibility, concrete enrollment goals for IE, faster download and upload speeds for IE recipients, continued provision of standalone broadband Internet access at reasonable rates, or the construction of additional Internet access points in underserved communities.”

The judge’s recommendations to the commission will make an interesting checklist in a few years for judging the success, or failure, of regulatory oversight in an intrinsically monopolistic industry. Some of Comcast’s customers will probably find it easier to read about that online than others.

–Ken Broder


To Learn More:

Comcast Gets a Merger Approval, but Objects to New Low-Income Requirements (by Jon Brodkin, Ars Technica)

California Public Utilities Commission Recommends to Approve Comcast Merger (by Jennifer Saba, Reuters)

Comcast-Time Warner Cable Merger Wins Preliminary California Endorsement (by Meg James, Los Angeles Times)

Match Made in Hell: Comcast and Time Warner Cable Earn Industry’s Worst Consumer Satisfaction Ratings (by Noel Brinkerhoff, AllGov)

Proposed Decision (Administrative Law Judge Karl J. Bemesderfer) (pdf)

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