California Floats Conditional Approval For Comcast/TWC Merger

New submitter Lord Flipper writes: The California Public Utilities Commission decision on the Comcast/Time-Warner proposed merger has just been released. It's not an exciting read, but the 25-bullet-point Appendix to the decision is interesting (PDF, starts on page 75). For example: "19. Comcast shall for a period of five years following the effective date of the parent company merger neither oppose, directly or indirectly, nor fund opposition to, any municipal broadband development plan in California, nor any CASF or CTF application within its service territory that otherwise meets the requirements of CASF or CTF."

Whoa! Comcast was not expecting this at all, and they're not happy about it. Here's one more, as an example: "8. Comcast shall offer Time Warner's Carrier Ethernet Last Mile Access product to interested [Competitive Local Exchange Carriers] throughout the combined service territories of the merging companies for a period of five years from the effective date of the parent company at the same prices, terms and conditions as offered by Time Warner prior to the merger."

The ruling by the CPUC covers all customers, present or in the future of the merged company, in California. What they're talking about is opening up Last Mile Access. This could be a step in the right direction, but the ruling today is definitely a surprise. It could nix the merger in California, or it could light a fire under the FCC's butts, or it could bring real competition to Internet access in California.

The CPUC is basing their entire decision on Common Carrier law (Setion 706, as opposed to Title II), and, unlike the projected FCC decision (coming around the 26th of the month) the CPUC's decision has all kinds of "teeth" as opposed to the FCC's "Title II, with forbearance" approach. It could get very interesting, very soon.

Comments

Weak

[Rhyas]

So let's allow the monopoly and reduction consumer options, but we'll delay it's full impact for 5 years. This doesn't make much sense, except to the Judge, who will be getting one hell of a kickback in 5 years.

Why not indefinitely?

[Noxal]

5 years? Seriously? Sounds staged, like it's merely to give the APPEARANCE of being tough on Comcast instead of actually being tough when being tough is warranted.

Re:Why not indefinitely?

[Em Adespoton]

There's something else that comes into play here too -- this would be brokered under Section 706, and they'd be held accountable to it. HOWEVER, they're also going to be accountable to Title II pretty soon, which will lay down an entirely different set of regulations they'll be required to follow, and (hopefully) last longer than 5 years. As such CPUC would be forcing them to open up the last mile while the FCC is also requiring them to stay net neutral (among other things). The combination of these two strategies doesn't give them too many ways to rake in the easy money -- they're going to have to work for it if they take the agreement. Smart move on CPUC's part! They can draft an agreement that by itself looks very innocent and somewhat reasonable, but paired with the other decisions coming down the pipe closes many of the loopholes in the short term, while giving communities time to start projects that won't be rescinded after 5 years (because when does that ever happen).

Hopefully other states follow suit.

Re:Why not indefinitely?

[swb]

I don't understand why they can't be happy with the annuity-like return on providing a utility service.

They could have been probably making better than average utility profits with no regulatory risk if they had backed off at some point in the past and quit jacking up the price of cable television, the cost of which pushed many people towards streaming in the first place and played fair with IP network management instead of gouging customers and content providers over phony congestion.

Instead they just had to keep pushing the rent-seeking, monopolist path and trying desperately to hold onto the TV business. Now the entire enterprise is at risk. People stream what they want cheaply instead of paying for shit channels at high prices, there's increasing regulatory pressure and entire cities are making an effort to supplant their true remaining value, high speed internet with a vastly superior replacement that only underscores their lack of investment and inferior product.

It's the same problem Microsoft faced in many ways. Relentless rent-seeking that only led people to seek other alternatives. Had Microsoft let up a little they could have probably put off the search for alternatives forever and been seen as a benign market giant like Google instead of as the evil empire.