Comcast-Time Warner Merger: California Joins New York in Scrutinizing Deal
As Comcast and Time Warner Cable fortify their argument for a merger against federal scrutiny, states are jumping in, too. California became the second state to voice its concern about the merger Thursday, questioning whether it is in the best interest of the customers.
California's public utility commission published a memo Thursday outlining why it feels the merger needs to be reviewed separately in the context of California before federal lawmakers give it a thumbs up or thumbs down. Comcast and Time Warner Cable are the two largest cable TV providers in the United States.
Comcast is currently the largest cable company in northern California, while Time Warner is the biggest in southern California -- it's this scale that has some worried. Will students and the poor get left behind?
"Comcast and TWC, through their California subsidiaries, would potentially combine the two largest providers of high-speed last mile broadband service in the state," reads the memo. "The Merger would impact competition and consumer welfare in California's market for wholesale telecommunications, retail voice, backhaul and broadband services."
"More importantly, the Merger would have an impact on broadband deployment in California as two of the largest cable broadband services in the state form one entity."
The California commission will:
- Gather and analyze information relevant to the proposed merger to determine the specific impact of the merger on California public interest criteria enumerated in Sections 854(a) and 854(c) of the Public Utilities Code
- Analyze what, if any, conditions related to California-specific effects of the merger may be appropriate
- Develop a record to inform additional comments that the Commission may file with regard to the merger application at the Federal Communications Commission
This isn't the first time a state has questioned the validity of a Comcast-Time Warner merger. New York was the first, with Governor Andrew Cuomo stating he will give the merger a "hands-on review" and the Public Service Commission is currently scrutinizing the deal.
Some of the fears floating around have to do with deploying more broadband into lower-income communities. With less competition there might be less incentive for a Comcast-Time Warner behemoth to expand into areas lacking proper services.
"A greatly enlarged, post-merger entity will have even more difficulty and less incentive to provide acceptable customer service," said Susan Lerner from Common Cause New York, an advocacy group that has filed a complaint against the merger with the PSC.
Comcast and Time Warner, however, argued earlier this week to policy makers that the facts simply aren't true, and that by combining forces they can actually reach more customers and do it more efficiently.
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