In a March post to the FSF Blog regarding the merger between Charter Communications, Inc., and Charter Holdings, LLC (collectively, Charter) and Cox Enterprises, Inc. (Cox), I identified the California Public Utilities Commission (CPUC) as "the final, time-sensitive hurdle preventing the formation of a combined company better able to compete in broadband, mobile, and video." In recent days that time-sensitive hurdle has grown substantially.
In a video conference that took place on June 15 described in a June 18 notice of ex parte communication, representatives from Charter reiterated its concerns that the CPUC's timeline for action "would not sufficiently account for unforeseen or unanticipated delays that may occur, and that failure to complete the Transaction review prior to the [Hart-Scott-Rodino Act (HSR)] expiration would jeopardize the Transaction and the consumer benefits it would produce."
Meanwhile, Broadband Breakfast (subscription required) reports that "[s]ome advocacy groups in California want the state to tack on more conditions if it approves Charter's $34.5 billion acquisition of Cox Communications." Any such conditions would be in addition to commitments – including, among other things, a "$275 million investment over three years to upgrade Charter's network to support symmetrical gigabit service across its legacy service areas" – already agreed to in comprehensive settlements with the Public Advocates Office and the California Emerging Technology Fund described in a May 18 notice of ex parte communication.
Coincidence? Who can say.
What we do know is that the parties to this transaction – which has obtained the approval of the FCC, the Department of Justice (DOJ), and every other state within which they operate – repeatedly have warned the CPUC that its failure to sign off on the deal by September 15 at a minimum "would cost the companies $2.5 million in filing fees and require them to wait at least another 30 days for DOJ clearance."
Accordingly, the parties have on numerous occasions urged the CPUC to act "promptly." Most recently, and as described in the June 18 notice of ex parte communication referenced above, Charter explained why CPUC action by August 13, rather than its next meeting scheduled for September 3 (that is, a mere 12 days before HSR clearance expires), is "necessary."
As Free State Foundation President Randolph May and I explained in comments submitted to the FCC, and as every other reviewing body has concluded, the combination of these two companies will benefit competition – and, in turn, consumers.
The time for regulatory arbitrage has run out.
The CPUC should act before the DOJ's HSR clearance runs out, too.
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