In a recent legal brief, a consumer watchdog agency in California named potential difficulties with broadband and voice quality — among other issues — as reasons that it is not in the least bit enthusiastic about Charter acquiring Time Warner Cable and Bright House Networks.
The Office of Ratepayer Advocates, an independent unit of the California Public Utilities Commission, states that there are not merger-specific benefits to the transaction, and specifically addresses the argument that some have made that the proposed deal is not as bad as the previously floated Comcast/TWC merger. The brief claims that idea is “without merit,” and quotes Jeff Blum, deputy general counsel for DISH Network saying if “Comcast’s deal for Time Warner Cable was a Category 5 hurricane, Charter/Time Warner is a Category 4.”
ORA is dubious of the quality and reliability of the broadband services currently offered by Charter and TWC, and asks CPUC to keep that in mind as it considers approval. “Charter and TWC consistently receive extremely poor customer satisfaction ratings and rankings in J.D. Power and the American Consumer Satisfaction Index,” the brief notes. It goes on to point out that the ACSI concludes that in general, things get worse, not better after mergers.
On the voice quality side, ORA reports that its analysis of Charter and TWC found “large gaps in the service quality data they provided in response to data requests, often having no data at all for certain voice service quality topics, or only providing data for limited time periods. Thus, in reviewing service quality metrics and performance, there is insufficient data provided by the Joint Applicants to demonstrate that New Charter will maintain or improve service quality.”
The brief further charges that where data was provided, “poor service quality is evident,” and the companies “have not presented any plans or concrete, performance-based commitments to address these voice service quality issues, and therefore, they have not demonstrated that voice service quality and reliability will be maintained or improved.”
Filed by ORA Attorney Lindsay M. Brown on March 1, the brief also details concerns with potential higher costs for consumers and fears that New Charter would keep online video distributors (OVD) from entering the market.
“The Commission should deny the proposed merger,” ORA concludes. “The Joint Applicants have not met their burden of proof and have not demonstrated that approval of the transaction would result in merger-specific benefits.”
New Jersey and New York have already approved the Charter/TWC union, but this recent poke in the eye from ORA was not the only indicator that the Golden State might not prove easy. Paul Goodman, legal counsel for an advocacy group Greenlining Institute, said last month that he believes the vote won’t be one-sided and it’s at a “tipping point” where the decision could fall one way or another.
Charter CEO Tom Rutledge said earlier this month that the company was “reasonably comfortable” in its continued work with regulators to complete the deal. California is slated to make the decision on the potential union around mid-May.
Filed Under: Industry regulations