Charter-TWC Deal Should Be Denied Says California Consumer Group

  • California is the last state approval Charter needs in merger
  • Group says deal would lead to higher prices with few options

California regulators should reject the proposed merger of Charter Communications Inc. and Time Warner Cable Inc. because the deal would likely lead to higher prices and lower service quality, a state advisory group said.

The cable companies need to demonstrate they will improve broadband speeds, extend services to low-income homes and meet other conditions before getting a green light from the California Public Utilities Commission, the Office of Ratepayer Advocates, an independent division of the commission, recommended in a March 1 filing.

The merger would leave 69 percent of southern California households served by Charter with no other broadband option, the group said. It requested a series of concessions by Charter, though even if the conditions were met, the deal would “still not be in the public interest,” the group said. Charter’s service would be available to about 6.4 million California households after the merger, the consumer group calculated.

California is the only state yet to approve the merger of Stamford, Connecticut-based Charter with Time Warner Cable and Bright House Networks, Charter’s Chief Executive Officer Tom Rutledge said this week at a media conference. He said he was “reasonably comfortable” the deal will be completed in May, a deadline that had been moved up from June by a California administrative law judge last month.

Charter and New York City-based Time Warner are awaiting approval from the U.S. Justice Department and the Federal Communications Commission. The FCC’s decision may come by March 24, according to information posted on its website. The companies announced the $55 billion merger last May.

Charter is committed to demonstrating the combination will lead to better networks and expanded broadband access to underserved homes and businesses, spokesman Justin Venech said in an e-mail.

Susan Leepson, a spokeswoman for Time Warner Cable, declined to comment.

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