Proposed CPUC Rejection of Comcast/TWC Adds Wrinkle to California’s Review of Deal

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Communications Daily – April 14 2015

California Public Utilities Commissioner Mike Florio’s filing Friday suggesting the CPUC reject the Comcast/Time Warner Cable (TWC) deal further unsettles the commission’s review of the merger, industry observers in the state told us. Florio said in his alternate proposed decision rejecting the deal (see 1504100049) that Administrative Law Judge Karl Bemesderfer’s proposed decision approving Comcast/ TWC with 25 conditions (see 1502170059) can’t effectively mitigate “adverse consequences” posed by the merger. Comcast “does not have a good record of abiding” by CPUC-imposed conditions and the company has contested all 25 conditions in the Bemesderfer draft, Florio said.

Florio’s proposed Comcast/TWC rejection delays a CPUC vote on the Bemesderfer proposal until at least May 21, a commission spokesman said. The CPUC earlier had delayed a vote on the Bemesderfer document until May 7, but CPUC rules dictate that the commission can’t vote on any proposed decision until at least 30 days have passed since the decision was filed, the spokesman said. It’s traditional for the commission to vote on all proposed decisions related to a particular proceeding during the same meeting, said Media Alliance Executive Director Tracy Rosenberg. Florio’s proposed decision also warrants a new comment period on the proceeding, with opening comments on the Florio proposal due April 30, the CPUC said. Reply comments are due May 5.

The new proposed decision likely is to affect the tenor of an already-scheduled all-party CPUC meeting on Comcast/TWC set for Tuesday in Los Angeles, Rosenberg said. The meeting is likely to still focus on the Bemesderfer proposed decision and Comcast/TWC’s potential effects on L.A.-area consum­ers, but it will be interesting to see how Comcast addresses the Florio proposed decision, Rosenberg said.

Comcast said in a statement that “we continue to believe [Bemesderfer’s] decision, reached after months of briefings, analysis, and careful consideration, has properly recommended approval of the Comcast-Time Warner Cable-Charter transaction.” The company said it’s still “confident this process will ultimately lead to approval of the transaction.”

The Media Alliance and a coalition of other public interest groups that have consistently opposed Comcast/TWC will endorse the Florio proposed decision, but a “third camp” consisting of CalTel and other groups that have taken a neutral or less negative stance to the deal could be a wild card, Rosenberg said. The Writers Guild of America, West said in a statement that Florio’s proposed decision “correctly recognizes that the merger would cause too much harm to Californians, and no conditions can effectively mitigate these harms.” CalTel is still “not taking a position” on whether the CPUC should approve or reject Comcast/TWC but continues to believe that any CPUC approval of the deal should include conditions “that protect the wholesale market, said Executive Director Sarah DeYoung.

Tuesday’s meeting will be important for all parties to “bring undecided commissioners on board” for or against Comcast/TWC, Rosenberg said. Commissioner Catherine Sandoval is likely to join Florio in voting against Comcast/TWC, while Commissioner Liane Randolph “may be less decided” on the deal than earlier believed, said an industry lawyer who has followed the CPUC’s Comcast/TWC review. CPUC Presi­dent Michael Picker and Commissioner Carla Peterman remain likely to vote in favor of Comcast/TWC but may have “softened” on the deal since a Feb. 25 all-party meeting (see 1502260060), the industry lawyer said. The meeting is set to begin at 1 p.m. PDT. — Jimm Phillips

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