California Commission Delays Vote On Comcast-Time Warner Deal

(RTTNews) - The California Public Utilities Commission has delayed its vote on Comcast Corp.'s (CMCSA) proposed acquisition of Time Warner Cable, Inc. (TWC) that will combine the largest and the second largest cable providers in the U.S. The commission has postponed voting date to May 7.

The move comes just a week after the Federal Communications Commission or FCC, said it is pausing the informal 180-day clock for the pending review of the deal. The FCC's decision on the merger was scheduled to be announced at the end of March, the end of the informal 180-day review period, but now it is expected in a couple of months.

A combined Comcast-Time Warner entity is expected to control an estimated 35 percent of broadband Internet service coverage and just under 30 percent of the country's pay television subscribers.

Comcast agreed in mid-February 2014 to acquire Time Warner Cable in a $45.2 billion all-stock friendly merger deal. Time Warner Cable was to merge with and into a 100 percent owned subsidiary of Comcast.

The deal was originally expected to close in early 2015. Shareholders of both companies had in October overwhelmingly approved the merger.

The approval for the deal is now seen to be much more than just the FCC and DoJ approval, with some of the larger states such as California and New York pulling in their weight. Both these states have powerful public utility commissions and they are likely to flex their regulatory muscle.

The PUC's of some of these states are expected to attach huge conditions for the approval of the deal. They may push for changes in the company's offering and and pricing in those areas, particularly seeking discounted broadband service for families from low-income households.

The local regulators would also look at the company agreeing not to lobby against local community-run broadband networks for five years.

Comcast has its task cut out, and have to push hard to satisfy the local regulators in order to get approval to go ahead with the merger. The states are wary as the merger will see Comcast significantly boosting its broadband and cable footprint in some of these cities and states.

With several states coming up with a slew of conditions, Comcast said to have shot out a filing with the Public Utilities Commission in March, alleging that several of these proposed conditions are "unnecessary and inappropriate and should not be adopted." The company argued that the PUC lacks authority to regulate broadband and decried limits on its advocacy as "unconstitutional."

New York's Public Service Commission has also sought the company to improve customer service, preserve local jobs, expand its low-income broadband offerings and invest $50 million into boosting its infrastructure in the state.

However, the state regulators would wait and watch for the reviews by the FCC and the DoJ to be completed as their approvals are expected to come with sweeping conditions. They are expected to add to the conditions according to the strong local requirements.