California Comcast-Time Warner merger review seeks strong consumer protections

Last week, California Public Utilities Commission Administrative Law Judge (ALJ) Karl Bemesderfer recommended strong conditions to protect consumers in his review of the proposed Comcast/Time Warner merger. Now, the full Commission must consider the ALJ decision and vote on it.

As one merger-related condition, the ALJ wants Comcast to expand its program designed to bring broadband to underserved Californians. Or, as one report said, “California wants Comcast to expand eligibility for this program, offer it throughout the Time Warner Cable territory, double download speeds to 10Mbps, provide free Wi-Fi routers, connect schools and libraries in underserved areas, and sign up at least 45 percent of eligible households within two years.”

In addition, the ALJ recommended conditions designed to improve the companies’ infamously poor customer service. Last week, Speed Matters reposted a quote from a Philadelphia (corporate home of Comcast) marketing consultant who said, “The stories that come out about them are just unbelievable in terms of the torture – not just bad service, but torture – they inflict on customers,”

To remedy this, the ALJ recommends:

“Comcast shall take action to improve customer service including respecting customer choice and competitive choices, and meet the Commission’s minimum service quality standards... related to voice service installation intervals and service orders completed, and complete installations, including broadband installations, in a time frame no longer than Time Warner’s average service prior to the merger.”

Bemesderfer listed 10 more areas where a merged Comcast-Time Warner must improve its record, ranging from achieving diversity goals to protecting customer privacy.

Comcast Executive Vice President David Cohen complained that California was imposing unfair and unattainable conditions. “Some of the suggested 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,” said Cohen.

On the federal level, the Federal Communications Commission and the anti-trust division of the Justice Department are continuing their own reviews of Comcast-Time Warner merger.

Among the media rights groups and interested public, there is still deep concern that a merged Comcast-Time Warner entity would dominate the high-speed broadband market – particularly now that FCC has increased the broadband definition speed benchmarks. The Writers Guild West opposes the merger because it will give the merged company anti-competitive control over programming, posing significant harm to their members.

At this point, an assessment of various analysts gives the proposed merger somewhere between 50 to 70 percent chance of regulatory success.

Proposed decision of ALJ Bemesderfer (Cal. PUC, Feb. 13, 2015)

Comcast gets a merger approval, but objects to new low-income requirements (Ars Technica, Feb. 14, 2015)
 
CPUC Administrative Law Judge Recommends Approval of Comcast, TWC and Charter Transactions (Comcast Voices, Feb. 13, 2015)