Charter, Cox Push Back on Need for Expanded CPUC Review of $34.5B Deal
Charter Communications and Cox Communications defended their proposed $34.5 billion deal to the California Public Utilities Commission (CPUC) in a joint filing posted Wednesday in docket 25-07-016 (see 2505160060). The CPUC Public Advocates Office (Cal Advocates), The Utility Reform Network (TURN) and Center for Accessible Technology (CforAT) filed various protests against the deal earlier this month seeking more information about the companies' proposed transaction.
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Cal Advocates sought testimony and evidentiary hearings because "disputed issues of fact are likely to arise." The office argued that the CPUC has "consistently" exercised jurisdiction over affiliates in mergers and should "consider the business operations" or annual revenues of Cox Communications California, "one of the top five fixed broadband providers in the state."
In their joint protest, TURN and CforAT said the CPUC "has broad discretion" in reviewing the public interest of proposed transactions.
Charter and Cox said in their filing that requests to include the companies' assets not included in the deal and to consider non-service issues were beyond the scope of the commission's review because Cox's affiliates aren't part of the proceeding and don't require approval for an ownership change. The companies argued that the entities being transferred also aren't subject to review under the commission's rules regarding utilities with annual revenues in the state exceeding $500 million.
Applying a heightened standard of review here would be "unreasonable," the companies said (see 2507150051). "Protesters seek to inject broadband issues into this proceeding." They noted that the transaction is only for an "indirect transfer of control" of Cox California and its "commission-regulated" telecom operations. Cox and Charter also disputed the need for the CPUC to investigate the broadband market power of the combined company, saying it's unrelated to the entities being transferred.
The advocacy groups sought more data from the companies about the impact of the deal on the companies' broadband and video market power. The joint application "suggests the proposed transaction will reinforce" the current cable and telecom "duopoly" in the state, TURN and CforAT said.
Citing FCC data submitted by Cal Advocates, Charter and Cox said they already "compete actively" with companies like Verizon, AT&T and T-Mobile for fixed broadband and mobile service. "Any additional providers of broadband services at the overlap locations will continue to do so after the transfer."
Beyond competition concerns, the groups also raised questions about whether the deal was financially sustainable or would harm Cox employees. The companies countered that their joint application provided "numerous data points demonstrating competitive benefits." They defended their proposed benefits package for current employees and provided "substantial evidence" regarding Charter's "anticipated improved financial condition" as a result of the deal.
In addition, the companies acknowledged Cox's existing $12 billion debt but said it didn't affect the transaction because it's "already associated with Cox's operations today," and there's enough information in their joint application to suggest good financial health. They filed a response this week to an administrative law judge inquiry regarding Cox's financial health and service footprint.