A California regulatory official has recommended denying Comcast Corp’s $45.2 billion acquisition of Time Warner Cable, presenting a potential stumbling block to the pending merger between the nation’s largest cable companies.
Mike Florio, a commissioner with the state’s five-member Public Utilities Commission, concluded the acquisition is not in the public interest.
“Handing Comcast a near-monopoly in high-speed Internet service in California threatens continued progress towards a more diverse and competitive media landscape,” the Writers Guild of America West (WGAW) said.
Under the merger, nearly 80 percent of Californians wouldn’t have a choice but to pick Comcast if they want broadband speeds of at least 25 Mbps, the benchmark broadband speed adopted by the Federal Communications Commission, according to Florio’s proposed order.
“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,” the proposal declared. “At the same time, the merger may undermine existing CLEC’s telephone service offerings, reducing competition for voice services and constraining customer options for those services.”
Florio, whose former employer The Utility Reform Network (TURN) also has objected to the merger, cited the possibility that the agreement would harm competitive phone providers that currently purchase wholesale access from Time Warner Cable.
“In the event that post-merger Comcast either ceases to provide such access in the former Time Warner territory, or provides it at higher prices or with more onerous terms … this would affect the ability of CLECs to provide their services to consumers,” the proposal stated. “As a result, and contrary to Comcast’s claim that the merger would have no effect on competition, the merger could have a significant negative effect on competition for voice services, by reducing the availability or increase the cost of alternate customer options.”
The PUC has scheduled a public hearing Tuesday in Los Angeles to discuss the merger. Two commissioners, Carla Peterman and Catherine Sandoval, plan to attend.
Earlier this year, an administrative law judge recommended approval of the agreement, subject to Comcast meeting a number of conditions.
"We continue to believe the administrative law judge’s decision, reached after months of briefings, analysis, and careful consideration, has properly recommended approval of the Comcast-Time Warner Cable-Charter transaction," said Bryan Byrd, a Comcast spokesman, reported by the Los Angeles Times.
Some analysts have questioned whether Comcast can easily win over the Democrat-controlled Federal Communications Commission, which must find the merger is in the public interest and is in day 165 of its unofficial 180-day review of the deal.