California PUC Scheduled to Vote on Charter/Cox Transaction: Additional Bites at the "Conditions" Apple Shouldn't Be Allowed to Upset the Pro-Consumer Cart

Next Thursday, the California Public Utilities Commission (CPUC) at long last is poised to vote on the transfer of control of Cox Enterprises, Inc. (Cox) to Charter Communications, Inc. (Charter). And with little time to spare. The question is, will extra-legal attempts to saddle this pro-consumer transaction with unjustified conditions "jeopardize the Transfer's public benefits altogether"?

In comments filed with both the CPUC and the FCC, a June 2025 Perspectives from FSF Scholars, and a series of blog posts, Free State Foundation President Randolph May and I consistently have argued that the proposed combination of Charter and Cox is likely to generate clear consumer-benefitting efficiencies and, as a result of the de minimis overlap of their service territories as well as the impact of intense competition from Big Tech, no significant offsetting harms.

As we concluded in our submission to the FCC:

[T]he combination of Charter and Cox promises numerous consumer benefits. These include [(1)] lower costs, greater choice, and additional innovation in traditional cable offerings (broadband and video) fostered by an enhanced ability to compete with often much larger rivals, including Big Tech platforms with global reach; (2) the expansion of Charter's hybrid [mobile virtual network operator] offering into Cox's footprint combined with lower costs through greater scale; and (3) the "onshoring" of Cox customer-service jobs. And given the lack of any meaningful overlap in service territories, not to mention the high level of third-party competition in all three marketplace sectors, there appears to be little, if any, basis for concern that the transaction could result in significant harms.

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Regarding the state of play in California, the last hurdle that the transaction must clear, let's start with (potentially) good news: as I noted in my June 23 post to the FSF Blog, the parties expressed concern in a June 18 notice of ex parte communication that the CPUC's failure to act by August 13 – that is, the very day upon which the vote is scheduled – could result in the expiration of the Department of Justice's Hart-Scott-Rodino (HSR) approval. That "would cost the companies $2.5 million in filing fees and require them to wait at least another 30 days for DOJ clearance."

Should a vote to approve proceed as scheduled, those imminent instances of inefficiency and waste would be averted.

And now, let's turn to the (potentially) bad news: as I described in that same blog post, commenters, certainly aware of that looming deadline, had urged the CPUC to impose still more conditions – that is, on top of those agreed to by the parties in comprehensive settlements (Settlements) with the CPUC's Public Advocates Office and the California Emerging Technology Fund (CETF) and described in a May 18 notice of ex parte communication.

(Without getting too far into the weeds, there are two proposals before the CPUC: (1) the Proposed Decision of Administrative Law Judge Ormond (PD), to which Charter and Cox roundly object, and (2) the Alternative Proposed Decision of Commissioner Matthew Baker (APD), which is based upon the Settlements.)

In reply comments, CETF took issue with the PD, contending that "[b]ottom-line, a settlement agreement requires the assent of its parties" (emphasis in original).

Similarly, in their reply comments regarding the PD, Charter and Cox asserted it "deviates from longstanding Commission precedent, resulting in 'clear legal error and technical inconsistency,' by improperly superseding Settlement terms, and imposing extraneous measures with no record support. It would materially impede Charter's ability to compete and jeopardize the Transfer's public benefits altogether" (citations omitted).

By contrast, Charter and Cox noted approvingly in their reply comments on the APD that it "correctly finds that the Transfer, with the Settlements, serves the public interest, and, 'paired with the mitigations' that Joint Applicants accept (subject to modest revisions), also 'address[es] concerns raised by parties outside the [Settlement A]greement[s]'" (emphasis in original).

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The Settlements to which Charter and Cox – as well as the CPUC's Public Advocates Office – are a party appear to be more than sufficient to address any potential harms resulting from this transaction. The CPUC therefore should reject calls to unilaterally supersede those agreements and instead approve the APD at its meeting next week.

Is California Leveraging the Clock to Extract More Concessions From Charter and Cox?

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.

Charter/Cox Transaction, Approved by Federal Regulators, Awaits California OK

On March 19, the New York State Public Service Commission approved – with questionable conditions – the transfer of control of Cox Enterprises, Inc. (Cox) to Charter Communications, Inc. (Charter). Weeks before, the FCC signed off on this pro-consumer transaction with no strings attached. The Department of Justice (DOJ), for its part, cleared the deal in September 2025, thereby triggering a one-year countdown during which the transaction must close lest that approval expire.

The California Public Utilities Commission (CPUC) now stands as the final, time-sensitive hurdle preventing the formation of a combined company better able to compete in broadband, mobile, and video. The parties therefore requested on February 27 that, should the CPUC find it necessary to hold an evidentiary hearing, it do so "promptly" – specifically, at some point next week. However, on March 2, the CPUC announced that it would not hold evidentiary hearings until April 20-24.

In a June 2025 Perspectives from FSF Scholars, FCC comments coauthored with Free State Foundation President Randolph May, and a brief submission to the CPUC, I consistently have argued that this transaction likely would deliver tangible consumer benefits without imposing significant offsetting harms. For example, in those comments filed with the CPUC, I wrote that:

[T]he combination of these two companies promises to provide California consumers of broadband, wireless, and video services with cost savings, expanded choice, and accelerated innovation, particularly in Cox service areas. Moreover, potential concerns regarding transaction-specific harms are obviated by (1) the de minimis overlap between the parties' respective geographic footprints, and (2) the substantial competitive pressures cable operators face from Big Tech, rival distribution technologies, and over-the-top content providers.

In a February 27 order, the Chiefs of the FCC's Wireline Competition Bureau, Office of International Affairs, and Wireless Telecommunications Bureau agreed, concluding that there are "certain public interest benefits [that] are likely to be realized, including promoting competition and consumer benefits for broadband and other services the combined company will provide" – and not "a significant likelihood of any material transaction-related public interest harms."

But as these things go, Charter and Cox also must obtain approvals from the states within which they operate. As noted above, New York recently blessed the transaction – though not without first extracting a figurative pound of flesh in the form of commitments to (1) spend at least $100 million on network upgrades to deliver symmetric Gigabit per second broadband speeds (that is, speeds well above the FCC's definition of "broadband": 100 Megabits per second (Mbps) downstream and 20 Mbps upstream), (2) replace 500+ Wi-Fi access points and provide free Wi-Fi access to non-customers, and (3) "fund digital inclusion and community initiatives."

That leaves California.

At the Morgan Stanley Investors Conference earlier this month, Charter Communications, Inc. CEO Chris Winfrey acknowledged that, "[n]o secret, we're working through California as the big state that remains open." And as a Charter spokesperson was quoted in a recent Broadband Breakfast article, "[w]e are working with California state regulators to complete the transaction review soon so we can bring lower prices, higher wages, and our 100% US-based customer service to more communities across the country."

There is now widespread agreement, at both the federal and state levels, that the combination of Charter and Cox would net substantial consumer benefits. California therefore should conclude its review with all due speed. Specifically, it should do so with a watchful eye toward the September 15 expiration date associated with the DOJ's approval – a deadline that, if missed, "would cost the companies $2.5 million in filing fees and require them to wait at least another 30 days for DOJ clearance."

Reduce Multiple Government Agency Merger Reviews

On June 11, the Connecticut Public Utilities Regulatory Authority reportedly issued an order approving the Verizon/Frontier merger. The approval is welcome news, insofar as it involves the clearing of a regulatory hurdle to the completion of a pro-competition, pro-consumer transaction. As explained in a blog post from last month, the FCC approved the Verizon/Frontier on May 16. In its order, the FCC found that there are no potential transaction-related public interest harms and that there are some likely public interest benefits from the transaction. Verizon's and Frontier's wireline services operate in different geographic territories, meaning consumers do not lose a choice of providers as a result of the merger. Moreover, Verizon is more likely to invest in and improve service in Frontier territories than Frontier would absent the merger. Verizon's acquisition of Frontier means that fiber will reach more Americans – sooner.

 

Even with the approval by Connecticut regulators, the Verizon/Frontier merger is reportedly subject to pending reviews by state regulators in Pennsylvania and California. This raises the process issue of whether overlapping reviews of proposed mergers by state regulators are likely to provide added public benefits or more likely to result in extra costs and delays due to redundant reviews. This is not a new issue; it was the subject of my December 2010 Perspectives from FSF Scholars, "Multiple Government Regulatory Reviews Burden Telecom Mergers with Too Many Conditions." Therein, I discuss the problem of compounding process costs and regulatory conditions that can result from redundant merger reviews. 

 

One approach for a more efficient, streamlined process for mergers involving interstate communications service providers is to enable a sole federal agency review process in which state regulators are encouraged to provide input regarding state-specific concerns. 

 

Also, the FCC could adopt rules or issue a declaratory order setting forth limits on state regulatory conditions for merger approval as well as limits on state-level merger review process shotclocks. Actions by state regulators that transgress those limits and conflict with federal law would be subject to federal preemption. Certainly, this approach is viable in the interstate wireless communications services context, as merger review by state public utility commissions effectively constitutes state-level restrictions on market entry contrary to Section 332(c)(3) of the Communications Act. 

 

Hopefully, Pennsylvania and California will promptly conclude their reviews of Verizon/Frontier and allow fiber broadband to timely deploy to more Americans. 

FCC Approves Verizon/Frontier Merger

Today, May 16, the FCC approved the Verizon/Frontier merger. The Commission's order approving the transaction stated: "Overall, we find that there are no potential transaction-related public interest harms and that there are some likely publicinterest benefits from this Transaction." As the agency's order explained: "[W]e conclude that Verizon is more likely to invest in and improve service quality in the Transaction market areas than Frontier would absent the Transaction. While the record indicates that Frontier has deployed fiber, no commenter disputes that it does not have funding in place for enhanced investment and additional fiber buildouts." The FCC's approval of Verizon's acquisition of Frontier means that fiber will reach more Americans – sooner.

 In an April 2 blog post, I noted that objections raised by public commenters in the Verizon/Frontier proceeding regarding IP interconnection, transitioning from legacy networks technologies to newer technologies failed to identify actual or potential harms arising from the transaction. Thus, I wrote that the Commission should not consider those matters as grounds for withholding approval of the transaction. The FCC essentially agreed with this view. The Commission's order characterized those same matters as not transaction-specific.

Credit is due to Chairman Brendan Carr and to staff in the Commission's bureaus who were involved in the review proceeding and prepared the Verizon/Frontier Order. Congratulations also are due to Verizon and Frontier. Hopefully, the consummation of the merger will accelerate fiber broadband deployment to Americans across the country. 

Also, the order stated the Commission accepts Verizon's commitment to reform its internal practices, and that the agency "expect[s] that these changes will prevent DEI discrimination in the post-transaction company, as consistent with the law and the public interest."

On the merits, approval of Verizon/Frontier is an easy call. Even so, the FCC's decision was right – and it was reached without excessive complications or undue delays. The Commission completed its review of Verizon/Frontier on day 189, just 9 days above the agency's informal shot clock.