The California Public Utilities Commission made an unusual trek to Los Angeles on April 14 to gather public views on the proposed Comcast-Time Warner Cable merger.
The meeting was called at the request of consumer and business groups who wanted to air their views on a mega-deal that will put much of the region’s cable television and broadband services, including all of the Tri-Counties except the South Coast, under the ownership of one cable provider.
The PUC has some leverage because it must approve the transfer of Time Warner’s franchise license to Comcast. It must also approve the transfer of Charter’s California properties to Comcast in phase two of the deal, which would put Comcast’s cable customers at 30 million nationally.
The most important action on this deal is happening 3,000 miles away in Washington, D.C., where federal regulators are weighing the pros and cons of approving a cable-broadband-phone realignment with Comcast and Charter controlling big chunks of the nation.
Already, a California administrative law judge has imposed a number of conditions on the proposed merger, as a condition of approval. One CPUC commissioner is advocating for his own plan, but if the CPUC plays its hand too strongly, the result could be a balkanized Southern California system that puts us far behind the rest of the nation in terms of broadband and cable services.
For the Central Coast, the stakes are very high. The prospect of Comcast replacing Time Warner in Ventura County and Charter in San Luis Obispo holds the opportunity for businesses to expand in the region without having to engage a new broadband provider every time they move into a new area. And it would make the distribution of cable TV advertising across multiple cities a lot easier.
Today, Time Warner has been, at best, a mediocre provider, and Charter is not much better. The arrival of Comcast, which already services much of Northern California, would probably mean faster speeds and more reliable customer service. But the tradeoff would be creating a single, powerful provider for all but a few areas — notably, the Santa Barbara and San Diego units now served by Cox.
The CPUC was right to bring two commissioners to Southern California and hear what local citizens and businesses have to say about the merger. Not lost in the discussion was the way that Comcast, which owns NBC, Universal Studios and other assets in Southern California, has dramatically increased its footprint in the state in recent years.
Two things stand out. First, the CPUC should take its time in weighing the merger. Second, its greatest leverage is in the area of low-cost broadband distribution.
Making sure that Comcast is an engaged corporate citizen — especially when it comes to providing broadband to underserved areas — might be one way for the CPUC to put its stamp on the merger without wreaking havoc on the region’s competitiveness.