Californians get a reprieve from the menacing Comcast-Time Warner Cable merger with an announcement from the California Public Utilities Commission it is putting further consideration of the merger deal on hold until later this spring.

Consumer groups loudly protested the PUC for holding its single public hearing on the merger in San Francisco, which has been served almost exclusively by Comcast for years. Most of the impact of the merger will be felt in Los Angeles, where Time Warner Cable provides service to around 1.8 million customers. The deal also involves Charter Communications customers in the region, who will also end up as Comcast customers if the deal is approved.

The PUC eventually agreed to hold a meeting in Los Angeles, but then scheduled it for Good Friday. Now it has changed the date for the four-hour public input session to April 14, one day before tax returns are due. No specific information about the time of the meeting could be located on the CPUC website, but we do know it will be held in the auditorium of the Public Utilities Commission’s building at 320 West 4th St. in downtown Los Angeles.

That the CPUC seems to be heading towards approving the deal does not come as much of a surprise. The CPUC has been surprisingly friendly to the communications companies it regulates, in the past approving questionable statewide video franchise reforms on behalf of AT&T and generally permitting most of the merger and consolidation transactions that arrive at the commission for review.

An advising administrative law judge attached a long list of recommended temporary conditions that should be included in any approval, covering everything from lobbying about municipal broadband to discount Internet service for the poor. Although Comcast claims it is willing to accept many of the short-term conditions, it also signaled objections to some of the most significant requirements, a potential sign Comcast might exercise its legal options in the future to be rid of the deal’s most onerous conditions.

Independent consumer groups not financially aligned with the cable industry are almost universally opposed to the merger as are many Californians.

New York regulators have once again kicked the can down the road, delaying a final decision on the Comcast/Time Warner Cable merger for the seventh time.

Pursuant to a request from Department of Public Service staff in the above-referenced matter, Comcast Corporation and Time Warner Cable Inc. agree to extend the time for action by the Public Service Commission on the Joint Petition, with a final order issued no later than Monday, April 20, 2015.

There is no clear sign why the Public Service Commission has further delayed its final decision, but the merger remains mired in controversy on both the state and federal level. The FCC recently stopped the clock on further consideration of the merger as legal wrangling continues over who gets to see copies of cable programming contracts with Comcast.

A draft report from California regulators recommended approval of the merger in February, but only after dozens of conditions were recommended to protect the public and competition. Final consideration of the merger request may come next week at a general meeting of the California Public Utilities Commission.

We grant the application of Comcast Corporation (Comcast), Time Warner Cable Inc. (Time Warner), Time Warner Cable Information Services (California), LLC (TWCIS) and Bright House Networks Information Services (California), LLC (Bright House) for approval of the transfer of control of TWCIS and Bright House to Comcast. In addition, we grant the application of Comcast, TWCIS and Charter Fiberlink CA-CCO, LLC (Charter Fiberlink) to transfer a limited number of business customers and associated regulated assets of Charter Fiberlink. — Proposed Decision of California Administrative Law Judge Karl J. Bemesderfer

In a decision widely expected by observers for almost a year, the California Public Utilities Commission (CPUC) is poised to conditionally approve the merger of Comcast and Time Warner Cable with dozens of pages of conditions to appease state politicians, concerned commissioners, and interest groups seeking to protect Californians from the competitive impact of what will easily become the state’s largest cable provider, serving 84% of households.

Administrative Law Judge Karl J. Bemesderfer issued his lengthy “proposed decision” in February, acknowledging the deal’s opponents have proved their contention the merger is not in the interests of Californian consumers, but then recommends approving it anyway:

In more concrete terms, the proposed merger between Comcast and Time Warner reduces the possibilities for content providers to reach the California broadband market. While the FCC’s pending reworked Net Neutrality rules may mitigate some of this effect, the sheer dominance of Comcast’s post-merger position causes us concern.

Parties have made a convincing showing of the anti-competitive consequences that Comcast’s post-merger market power may have on the deployment of broadband in California, and of anti-competitive harms that would occur in California if the merger is consummated. We are also persuaded by evidence of Comcast’s Internet Essentials program’s weak performance in closing the digital divide in California and fulfilling universal service goals, and thus do not view it as a mitigating factor without additional conditions.

While the protesters and intervenors vigorously assert that we should deny the applications outright, they also urge us, in the alternative, to impose conditions ameliorating the potential harms should we decide that such conditions are within our powers and sufficient to render the resulting transaction not adverse to the public interest.

While we are troubled by the protesters’ and intervenors’ many examples of potential harms that may flow from the merger, we believe that those harms may be mitigated by the imposition of conditions on our approval consistent with our powers under state and federal law.

Bemesderfer proposes a lengthy list of conditions the cable giant must meet for at least five years after merging, including offering discounted Internet service programs, improve customer service, provide free backup batteries for Comcast phone service, and promise it will stop lobbying against community broadband projects.

But the judge said nothing about Comcast’s runaway rate increases likely in a de facto monopoly environment, its own vice president’s prediction that all Comcast broadband customers will be enrolled in a usage-based billing scheme within five years, and lacks specificity explaining the enforcement measures the CPUC will take against Comcast if it fails to meet the commission’s conditions.

The five-member commission could take up Bemesderfer’s recommendations as early as the end of this month, but is more likely to postpone consideration until later this spring. The commission can adopt, change, or discard Bemesderfer’s recommendations.

Accusations that the CPUC has grown too cozy with the companies it regulates only grew louder after consumer groups complained Bemesderfer bent over backwards trying to get Comcast’s merger deal closer to the concept of “the public interest.” For them, it isn’t nearly close enough.

“To read the recent 100-plus-page decision from the CPUC, you wouldn’t think this proposed merger is good for anyone,” writes Tracy Rosenberg, executive director of Media Alliance, which opposes the deal. “The regulator approved the merger with more than two dozen conditions to mitigate the bad impacts on Californians.”

Rosenberg hints the CPUC is ill-equipped to effectively watch over a multi-billion dollar telecom giant like Comcast. By proposing an ambitious set of requirements the CPUC cannot possibly enforce or defend in court with its current limited budget. Taxpayers may have to dig deep to cover legal bills likely to pile up in Sacramento if Comcast decides to rid itself of CPUC meddling in the courts. Comcast has already announced strenuous objections to at least 20 of the 25 conditions Bemesderfer recommends imposing.

Comcast to California: Hey, slow down a moment. We don’t like your pre-conditions.

Ars Technica’s Jon Brodkin chronicles Comcast’s objections in a convenient clickable format:

The table of contents of Comcast’s 46-page report gives a sense of just how much the cable company disagrees with California’s proposed conditions. Here are the main bullet points as written in Comcast’s argument; we’ve added hyperlinks and additional text in italics to further explain the requirements and Comcast’s objections:

The proposed decision improperly expands the scope of the proceeding beyond the commission’s jurisdiction and authority.

• The proposed decision would impose sweeping common carrier utility type regulation on the merged entity’s broadband and VoIP services in derogation of federal and state law.
• Other conditions in the proposed decision exceed the commission’s authority or are otherwise unlawful. [According to Comcast, these conditions include requirements related to Lifeline phone service, diversity, website design standards, backup batteries, video programming, non-interference with competing voice services, buildout requirements, opposition to municipal broadband projects, and privacy complaints.]

The proposed decision adopts intervenors’ [merger opponents] flawed analyses and claims regarding market share and competition.

• The transaction will not increase market power or reduce consumer choice.
• The FCC’s new definition of “advanced telecommunications capability” has no relevance to this proceeding. [The Federal Communications Commission recently said that Internet service must provide at least 25Mbps download speeds and 3Mbps upload to qualify as broadband or “advanced telecommunications capability.” That decision increased Comcast’s “broadband” market share to 56 percent nationwide.]
• Concerns regarding future overbuilding are baseless and unsupported by the record. [The question here is whether Comcast and Time Warner Cable would ever compete against each other directly if they cannot merge.]
• The transaction presents no risk to edge providers [companies that deliver content and applications over the Internet], the highly competitive internet backbone, or consumers’ access to broadband content.

Other factual findings in the proposed decision are invalid and do not support the suggested conditions.

• TWC is not a “policy competitor” to Comcast. [The California judge’s proposal said TWC is a “policy competitor” to Comcast because it has different positions and business models. “For example, Time Warner has applied to the Commission to offer Lifeline as a tariffed service, while Comcast has not,” the judge wrote.]
• Mandatory diversity measures are unnecessary. [Comcast says California’s requirements amount to mandatory race-based quotas that violate state law and the US Constitution.]
• Concerns regarding Comcast’s battery backup program and other network safety issues are based on inaccurate assertions.
• The transaction will not harm wholesale offerings.
• Internet Essentials is successful by any objective metric and the program’s extension to TWC and Charter areas will provide substantial public interest benefits. [Internet Essentials is a low-cost Internet service for the poor that Comcast was required to create in exchange for approval of its 2011 acquisition of NBCUniversal. California wants Comcast to expand program eligibility further than Comcast is willing to. Comcast objects to a requirement to double download speeds from 5Mbps to 10Mbps. California also wants Comcast to achieve a 45 percent adoption rate among eligible consumers, which Comcast says is an unrealistic goal.]
• The proposed decision imposes unlawful rate and performance regulations based on inaccurate assumptions about TWC services and is in all events unjustified. [California wants Comcast to offer standalone broadband service for five years at prices not exceeding those charged by Time Warner Cable.]
• The proposed decision adopts incorrect data regarding Comcast’s quality of service and network safety and reliability.
• The “benchmark” competition theory adopted in the proposed decision is refuted by the record evidence. [California proposes an annual report requirement because the merger would eliminate the commission’s ability to compare reliability, customer service, prices, and service offerings of Comcast and TWC.]
• Other suggested conditions are unauthorized and unnecessary. [This section further covers a requirement to not interfere with voice services. Comcast says “it is unnecessary because Comcast does not interfere with voice services or degrade customers’ ability to complete calls.” This section also addresses a website accessibility requirement, which Comcast says is unnecessary because the company “already offers a comprehensive and user-friendly website that benchmarks to best practices for website accessibility.”]

Rosenberg argues a merger like Comcast and Time Warner Cable should have been easy to reject just on the basis of its size and scope.

“Economists use a scale called the Herfindahl-Hirschman Index to measure the level of concentration in a market,” Rosenberg said. “Anything with an HHI increase of more than 200 points is likely to enhance market power. The HHI increase for the merger of Comcast and Time Warner Cable is a 4,927-point increase in the fixed broadband market.”

In plain English, “California customers have nowhere to run,” Rosenberg writes. “If they had a choice, many of Comcast’s customers wouldn’t be their customers. If the merger with Time Warner goes through, that choice is about to get a whole lot worse.”

Instead of accommodating a merger proposal that seems clearly the opposite of the public interest, Rosenberg suggest an easier alternative.

“If something takes two dozen onerous conditions to prevent significant damage, then maybe the public is better off without it,” Rosenberg writes. “On March 26, the commission will vote on the Comcast-Time Warner Cable merger. A million conditions can’t make this a good enough deal. There comes a time to just say no.”

Image from the Philadelphia Daily News

Comcast customers in Philadelphia, home to Comcast’s world headquarters, get no better treatment from the cable company than anyone else. But customers in the city of Brotherly Love now at least have a small edge on the rest of America.

A Philadelphia Daily News columnist just so happens to have the direct phone number of Comcast CEO’s 92-year old mom and is willing to use it.

“I grew up in a neighborhood where even the really bad kids could be brought back in line when someone tattled on them to their moms,” wrote columnist Ronnie Polaneczky. “That’s why I picked up the phone and called the 92-year-old mother of Comcast Corporation’s chairman and CEO Brian Roberts. We all know that Roberts’ company has been very, very bad. Comcast is in the news every other day with another irate customer’s tale of horrible treatment from the behemoth cable provider.”

Polaneczky decided to use the nuclear option after reading an email sent by Diana and Jason Airoldi, recent Philly transplants from Washington, D.C. The Airoldi’s had an appointment with Comcast to install service Dec. 23. It was now Feb. 1 and after multiple broken promises they were still waiting.

“In almost the same amount of time it took Noah to float the Ark, the country’s biggest cable company and home Internet-service provider hasn’t been able to turn on the Internet and cable in the Airoldis humble South Street apartment,” the columnist noted.

But they were by no means alone. There were also sad stories from:

• Sandy and Charles Arnold, who have tried since Dec. 14 to get Comcast cable and Internet at their Ocean City home;
• Bridie Gallagher, a senior citizen who has tried for months to get the overcharge on her bill fixed;
• And Christine Yelovich, whose odyssey into the Comcast’s multiple circles of service hell should only be told with a horror-movie soundtrack playing behind it.

Answer: Call Mama

Suzanne Roberts, the 92-year old mother of Brian, accomplished more for the Airoldi family in one day than the entire Comcast juggernaut could manage in more than a month. By day’s end, the Comcast trucks descended on the neighborhood and the family was finally connected.

Unfortunately, Comcast does not offer 1-800-SUZANNE for beleaguered customers, who have developed a seething dislike for the cable company. One horror story after another, accompanied by news of PR disasters that routinely spread across the country faster than measles all testify to Comcast’s bottom of the barrel customer ranking as among the most hated companies in America.

Even PR damage control marketing experts now consider Comcast hopeless.

“The stories that come out about them are just unbelievable in terms of the torture – not just bad service, but torture – they inflict on customers,” said Chris Malone, managing partner of Fidelum Partners in Newtown Square, a specialist in fixing the reputations of companies that shoot themselves in the proverbial foot. “I feel quite confident that if their services were offered more broadly, their ranking would be much lower.”

Malone told Polaneczky the reason more Americans hate Comcast than BP — the company that threatened the Gulf of Mexico’s entire ecosystem after recklessly allowing more than 200 million gallons of oil to spill and stain the beaches from Louisiana to Florida — is the cable company’s relentless greed.

‘At the root of Comcast’s problem,’ Malone says, is that ‘the company is focused on maximizing financial benefits at the expense of its customers and employees,’ who know that “the company does not have their best interests in mind.”

Even Comcast’s new customer service czar, Charlie Herrin — head of “customer experience,” hired to “ensure that we are delighting our customers at each touch point,” has waved the white flag, seemingly admitting the company is an unmitigated mess.

Despite annual commitments from Comcast management starting in 2007 that Comcast was “redoubling” its efforts at improving customer service, the pesky fact that twice nothing is still nothing left Herrin sheepishly lowering expectations:

“In fact,” Herrin said, “it may take a few years before we can honestly say that a great customer experience is something we’re known for.”

A few years?

Polaneczky

These facts should be penetrating the offices of every state and federal regulator contemplating the public interest benefits of approving a merger deal between Comcast and Time Warner Cable. Sweeping aside the Comcast-ghostwritten letters non-profit, civil rights, and political groups have sent to regulators (while running to the bank to cash Comcast’s checks), the columnist for the Daily News is scratching his head pondering why anyone would even think of letting the bad become bigger to get even worse.

“If Comcast is badly serving so many customers now, why should it be allowed the opportunity to badly serve millions more?,” she asked. “After my column ran, I got a call from Jeff Alexander, the regional spokesman for Comcast’s local operations. He apologized for what had happened to the Airoldis and invited me to visit some of Comcast’s shiny new retail stores, where customers can pay bills, return cable boxes and such. ‘Sure,’ I said, to be agreeable. But honestly, who cares?”

The most useful thing Polaneczky got from Alexander was his direct e-mail address with an invitation to forward complaints to his personal attention to resolve. So why not use it?

“Email me ([email protected]) about your Comcast problems,” Polaneczky wrote. “Detail the ways the company has been torturing you, and I will pass your stories along to Alexander, who seems like a very nice man. I can’t guarantee results. Lord knows your complaints have been cheerfully heard then ignored before. But I can promise that if Alexander doesn’t resolve your problems, I’m calling Mama Roberts again. I have her number on speed-dial.”

Perhaps Mama should come out of retirement and take on the job Perrin seems be ready to quit. It probably wouldn’t take “years” to see improvements if the CEO’s mom carried a big stick around Comcast’s Philadelphia headquarters. She should start in her son’s executive suite.

No approval for the Comcast-Time Warner Cable merger proposal in New York for yet another month as the state Public Service Commission has once again delayed making a final decision until the end of February.

“Pursuant to a request from Department of Public Service staff in the above-referenced matter, Comcast Corporation and Time Warner Cable Inc. agree to action by the Public Service Commission on the Joint Petition at a Commission Session held on or by February 26, 2015, with a final order being issued no later than March 3, 2015,” is the word from Comcast and Time Warner Cable’s law firm.