Here in California, a coalition of public interest advocates, activists and the public have spent the last year fighting the proposed merger between Comcast and Time Warner Cable.
The merger would result in a “MegaComcast” with a virtual monopoly over broadband and video services in California. Comcast’s service area would cover at least 84 percent of California’s population, and a majority of Californians would have Comcast as their only choice of broadband provider.
The merger would not only harm consumers by allowing Comcast to charge higher prices and provide worse service quality, but also would cause equally severe harms to activism, content creation and innovation. It’s no wonder that former FCC Commissioner Michael Copps referred to the transaction as “a disaster for the American public.”
The merger has been under review by the California Public Utilities Commission for almost a year. The commission recently issued an 87-page proposed decision which confirms that the merger would be a disaster for Californians, the California economy and the public interest. It concludes that the PUC’s only reasonable action would be to deny the merger outright.
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The decision spends almost 80 pages explaining that the proposed merger would cause serious harm to low-income families, content creators, communities of color and Californians in general. However, in a stunning reversal, the decision then bends over backward to approve the merger through the use of 25 conditions – conditions that will be insufficient, difficult to enforce and, given Comcast’s historical refusal to comply with conditions, ineffective. So, what’s going on?
The decision’s sudden change in direction is puzzling, until you look into the PUC’s behavior on net neutrality. Back in September, the PUC initially endorsed strong net neutrality protections – specifically, that the FCC should reclassify broadband under Title II of the 1996 Telecommunications Act. The PUC approved this plan with a 3-2 vote. But then, PUC President Michael Peevey asked whether any of the commissioners wanted to change their vote. When none did, Peevey called a five-minute break that ended up lasting 20 minutes.
When the commissioners returned, Carla Peterman rescinded her “yes” vote. The PUC – the agency charged with representing a huge swath of the entire nation’s telecommunications consumers – ended up not making a recommendation to the FCC. While we don’t have the details of what went on behind closed doors, it’s clear there was a great deal of external pressure on the PUC to change the vote to a more industry-friendly position. We suspect that the commission is under the same kind of external pressure to approve the Comcast-Time Warner Cable merger.
The PUC is currently under fire for unseemly relations with the corporations it is charged with regulating. Some of its commissioners have put themselves in situations where they appear to be allowing outside interests to influence their decisions.
The PUC’s new president, Michael Picker, has so far done an admirable job of responding to these concerns. He and the current commissioners have publicly stated that they support open, transparent commission proceedings free of undue influence or backroom deals.
As we previously noted, the proposed Comcast-Time Warner Cable merger would cause irreparable harm to California’s economy and residents, and those harms cannot be prevented or reduced through the use of conditions. This is the first chance for Picker to back up his promises with actions, step forward and demonstrate that the PUC is performing its duty and acting on behalf of California consumers by denying the Comcast-Time Warner Cable merger.
Kathay Feng is executive director of California Common Cause.