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

Why only five years?

[zuki]

This smells just as good as these "only $24.99 for the first 12 months" offers.

Because after that, it reverts back to the old price of $49.99.

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?

[swb]

5 years sounds like discouragement pricing. Long enough that they might turn the entire deal down.

But it's also long enough that if they DID take the deal they couldn't drag their feet so long that it never was effectively available.

And it may be long enough that the investment required on their part might be financially unpalatable to just walk away from at the 5 year mark, plus there's the chance that as the five year mark approached there might be all kinds of difficulty in actually stopping it, either from a disentangling networks perspective or from all kinds of protests and lawsuits that prevent them from stopping.

And who knows, maybe after five years of doing it their genius MBAs might just figure out that even though the margin on it is small, the revenue is like an annuity and has some kind of balance sheet value that they WANT to keep it going.

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.

Garbage..

[wbr1]

BS Comcast is not happy about this. They have the cash and power to out compete any last mile startup on municipal network in that five years. this gives the public the feeling that something is being done about these ISPs, while giving them more of a stranglehold on the market in a short time. They may act affronted all they like but in reality, behind the mask they are rejoicing because they know what it would mean for them. Whoever architected this, be it lawmakers or some behind the scenes lobbyist or industryman, they are very smart. Well played there bro. I hope you karma is to be ass-fucked my syphilis ridden camels from here to eternity.
Data connections should be a public utility. period.