California ALJ recommends for the approval of Comcast/Time Warner Cable merger

Monday, Feb 16, 2015

Amidst much hand-wringing about the prospects for the Comcast/Time Warner Cable merger, the companies got some good news Friday (Feb. 13).   

A California Public Utilities Commission (CPUc) administrative law judge has recommended that the state approve the merger with over a dozen conditions, including improving customer service, backup batteries for VOiP service (one of the issues the FCC is mulling as part of the IP transition), extending Comcast's Internet Essentials low coast broadband program to TWC customers, and upgrading K-12 Internet infrastructure.   The decision points out that FCC and DOJ may have other conditions, or come to another conclusion. The decision also focuses on phone and broadband, and does not address video programming.   

The decision from ALJ is not the final word. "This is the proposed decision of Administrative Law Judge Bemesderfer," the CPUC said in in the preamble to the decision. "Until and unless the Commission hears the item and votes to approve it, the proposed decision has no legal effect.   

Comcast EVP David Cohen, who is motor-manning the deal's regulatory vetting, said Comcast is still reviewing the decision and recommendations and says tia appears that "a number of them are ones that will benefit consumers and the company can work with." There are 14 conditions in all, but Cohen did not say what number of those Comcast could work with and signaled some of them were problematic.   

"Some of the suggested conditions...could potentially prevent the full benefits of this transaction being realized by Californians, and create a more intrusive regulatory regime where innovative services could be hampered rather than helped," he said.   

He said among those are penetration rates and time frames he says are "unattainable" under current market conditions.   
Cohen was sounding like an early 2015 closing was still possible, though the FCC and DOJ are unlikely to sign off until the court challenge by CBS and other programmers to third-party access to deal programming contracts is resolved, which might not happen until late spring, or later.   

"We already have the vast majority of state and local approvals necessary to close the transaction," Cohen said, "and we continue to work with the FCC and the DOJ on the federal approval process, as we work toward an early-2015 closing."



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