An administrative law judge for the California Public Utilities Commission has recommended approval of the proposed merger of Comcast and Time Warner Cable, but with significant conditions to address concerns that the merged company will be too great a concentration of market power.
Judge Alj Bemesderfer issued a proposed decision on Friday. The PUC may take up the proposed decision at its March 26 meeting.
The conditions include a requirement that Comcast offer, for a period of five years, standalone broadband service at the same price that Time Warner Cable offers it. That is currently $14.99-per-month for a speed of 3 Mbps. The conditions also would require Comcast to expand enrollment in Comcast's Internet Essentials program, broadband service that is offered to low-income customers. Comcast would be required to enroll at least 45% of eligible households within two years of the merger.
Among the other conditions are ones requiring Comcast to offer all of its customers in the state to use Roku or other independent programming platforms on the same basis that TW Cable did before the merger.
It also calls for Comcast to connect schools and libraries, and to make improvements to customer service. It also calls for Comcast to make upgrades to broadband service in underserved areas. It also would prohibit the company from opposing efforts by city governments to launch their own Internet service.
"The merger presents Time Warner customers with the real possibility that they will receive poorer customer service, fewer service offerings, and fewer program choices from Comcast after the merger than they received from Time Warner before the merger," Bemesderfer wrote in justifying the conditions.
He noted, however, that the PUC's jurisdiction was largely limited to the companies' offerings of voice communications and broadband deployment, not video cable service. He expressed concerns over the ability of content providers to reach Comcast customers.
"Instead of the choice between two large cable systems delivering high-speed broadband to upwards of 80% of the households in California, the edge or content provider will have only one choice, Comcast," he wrote.
Comcast said that the proposed approval was an "important step" but nevertheless expressed reservations about some of the conditions.
Its executive vice president David L. Cohen said that some of the proposed conditions were ones that they could "work with," but nevertheless said that "at least some of the suggested conditions lie outside the authority of the CPUC or are unrealistic."
"For example, some of the penetration rates and time frames are simply unattainable under market conditions, especially with populations that have been slowest to adopt broadband," he wrote. "Deeper broadband penetration among all populations is a goal we share, and one we've worked very hard on for the nearly two decades we've been marketing broadband."
The FCC and the Justice Department are reviewing all aspects of the proposed merger, along with state attorneys general.
Groups like the Writers Guild of America, the Greenlining Institute and the Consumers Union had argued against the merger before the state PUC.
© 2015 Variety Media, LLC, a subsidiary of Penske Business Media; Distributed by Tribune Content Agency, LLC
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