The Federal Communications Commission has opened a proceeding to review the proposed merger announced in May between Charter Communications Inc. and Time Warner Cable Inc., and the associated acquisition of Bright House Networks by Charter, and the companies have filed their “public interest statement” kicking off the FCC’s review of the transaction.
Local governments and the public will be given an opportunity to file comments on the proposed transaction. While the FCC has not yet set deadlines for filing comments, it will likely do so soon.
The FCC review of the merger application will provide a unique opportunity for local governments to object to the merger (even if the merger is not subject to review at the local level) and raise concerns about the merger’s effects on localities, as well as to seek conditions that could protect local communities should the FCC decide to approve the merger. This could include, for example, conditions that protect public, educational and government access; that require Charter to continue to provide a base level of Internet service at a low price, and that ensure Charter does not abuse its control over the “last mile” broadband connection to the home.
It is not just the federal government that may review the proposed transfer. Local governments may also have authority to review the proposed transfer although the scope of local review will depend on state law and on the local franchise. If your community is already served by Charter, the transaction may still be subject to local review, depending on the terms of the franchise. Local reviews are subject to specified federal timelines and standards, as we’ve described in a transfer toolkit available here.
The merger may also require approval by a state public utilities commission whose review of the merger may not be limited to considering the effect of the merger on cable services. For example, we expect the companies to file an application with the California Public Utilities Commission seeking approval for the transfer of the companies’ state-issued telecommunications authorizations. As with the proposed merger between Comcast and Time Warner that dissolved earlier this year, the CPUC will likely issue a scoping ruling focusing on broadband and will likely concentrate on whether the merger will be beneficial on an overall basis to state and local economies, and to the communities in the areas served by the merged company. Although the CPUC issued a proposed decision granting Comcast and Time Warner’s application to merge, it laid out 25 conditions intended to mitigate the harms of the proposed merger, such as addressing broadband deployment and low-income broadband access customer services. Localities could encourage the CPUC to take a similar hard look at the Charter and Time Warner Cable merger.
As another example, the New York State Public Service Commission also took a hard look at the proposed merger between Comcast and Time Warner Cable. Before the merger dissolved, Governor Andrew Cuomo announced that the PSC would conduct a thorough and rigorous review of the merger to determine whether it would be in the best interest of Time Warner’s New York customers and the state as a whole, and how the merger would impact state policies such as efforts to expand broadband in underserved areas and improve broadband access to schools. The State took the position that the burden is now on a cable company to demonstrate that a transaction is in the public interest – so there may be opportunities for New York communities to raise concerns about the merger to the PSC.
In any state where the proposed merger is subject to review in whole or in part by a state agency, local governments and schools should be looking at whether there are opportunities to obtain protective conditions and to participate in proceedings to express their concerns on issues such as broadband access and the “digital divide,” as well as the proposed merger’s effect on safety, reliability and build-out to unserved and underserved areas.
