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California PUC urged to reject the Comcast – Time Warner Cable merger

December 11, 2014

Greenlining Institute ~ Consumers Union ~TURN ~ Media Alliance ~ California Common Cause

 

Low Income, Consumer, & Media Advocacy Groups Urge California PUC to Reject the Comcast – Time Warner Cable Merger

SAN FRANCISCO, CA – Advocacy groups representing low income Californians, consumers, and diverse media voices urged the California Public Utilities Commission (PUC) to reject the proposed merger between Comcast and Time Warner Cable in filings made with the PUC late yesterday.

The merger would combine the two largest providers of both cable and Internet service into one giant corporation that would dominate the marketplace here in California and across the country.  The California PUC, which oversees telephone and broadband Internet service in the state, is currently reviewing the merger to determine whether it is in the public’s interest.

“This merger is a terrible deal for Californians, particularly for communities of color and low-income consumers,” said Paul Goodman, Legal Counsel for the Greenlining Institute.  “It will give Comcast unprecedented control over telephone and broadband services in California and is sure to mean higher prices for consumers, businesses, schools and libraries, as well as less diverse content and fewer choices for the public.”

The Greenlining Institute called on the PUC to turn down the deal, in a filing submitted with Consumers Union, the policy and advocacy division of Consumer Reports.   The filing noted that the proposed merger would cause disproportionate harm to low-income communities and communities of color, both of which already have lower broadband adoption rates.   In addition, the proposed transaction would give Comcast the power to control which television channels are available to watch, potentially eliminating non-English content and diverse viewpoints from communities of color.

This concern is heightened by Comcast’s generally weak track record with communities of color and lack of minority contracting.  While California telecommunications providers reported spending over $2.6 billion on supplier diversity in 2013, Comcast’s share of that amount was only $24 million, by far the lowest amount of any provider.

Under the merger, Comcast would gain an estimated 47-49 percent of the residential high-speed broadband market (connection download speeds at 10 Mbps and higher).  One of the key areas where Comcast would extend its dominance is Southern California, including the Los Angeles market.  Online video programmers would be dependent on Comcast’s “last mile” network for access to millions of consumers.

“If this merger goes through, Comcast will become the de facto gatekeeper of the Internet with tremendous power over who can pass through the gate, and on what terms,” said Delara Derakhshani, staff attorney for Consumers Union.  “No one corporation should be allowed to dominate the marketplace and have that much control over our choices.  Consumers can expect higher prices, fewer choices and even worse customer service unless this merger is stopped.”

In a separate filing, TURN urged the California Public Utilities Commission to reject Comcast’s blatant bid for domination of local phone, video and broadband markets. TURN said it is critical that the Commission look at the national picture.   If approved, the merger will result in Comcast being the biggest provider of broadband in the US. In California it would cement the already existing duopoly of an incumbent telephone and a cable provider, leaving customers with even fewer options and hamstringing competition.

“Mega-mergers are bad for consumers,” said Mark Toney, executive director of TURN.  “Allowing Comcast and Time Warner to merge their phone operations here in California inevitably means fewer choices for consumers.  For Comcast, or anyone else, to suggest that this merger will increase competition is simply ludicrous.  Comcast will not guarantee that prices won’t go up or that pressure to sign up for more expensive bundles won’t continue.  In the past the CPUC has been too willing to accept empty promises that mergers won’t hurt consumers.  Regulators should stand up for consumers, and stand against this anti-competitive merger.”

In its filing with the PUC, California Common Cause wrote that no package of concessions or conditions is capable of addressing the fundamental flaws in this ill-conceived mega-merger.  The filing notes that the media landscape has been transformed in the last several decades by rampant consolidation and growing gate-keeping – a clear threat to the local and diverse media upon which our democracy depends.  Vesting outsized gatekeeping power over what Californians may see and say – on the cable network and online – undermines the public interest specifically – and democracy broadly.

“A robust and vibrant media is crucial to maintaining open, fair, and democratic discourse,” said Kathy Feng, Executive Director of California Common Cause.  “The proposed Comcast/Time Warner Cable merger would consolidate considerable gatekeeper control in the hands of one company, limiting the diversity of news and information for Californians and threatening the foundation of our democratic society.  California Common Cause strongly urges the Commission to reject Comcast’s proposal as harmful to the public interest.”

Media Alliance focused on the poor performance of Comcast’s Internet Essential’s program and Comcast’s lousy customer service record in their filing.  Media Alliance executive director Tracy Rosenberg commented “Internet Essentials has a better record as a Comcast public relations project than as a broadband adoption program. The PUC needs to consider whether random throttling of Internet transmissions, virtually constant price increases and channel-slamming of public access channels can be anticipated to have adverse impacts on Californians. We say yes, they will and no merger should be approved.”

Contact:  Michael McCauley, Consumers Union, mmccauley@consumer.org or 415-902-9537 (cell); or Mark Toney, TURN, 415-929-8876, ext 301; Sarah Swanbeck, California Common Cause, sswanbeck@commoncause.org, 916-520-4070; Tracy Rosenberg, Media Alliance, tracy@media-alliance.org, 510-684-6853