The Empire State strikes back and threatens to blast Time Warner and Comcast's $42.5 billion proposed merger unless concessions are made to New Yorkers, while California steps up its scrutiny of how the synergies of the media company's combined forces will affect working-class Californians.
Even if the Federal Communications Commission moves past antitrust suspicions and approves the merger between the two media heavyweights, New York could block the agreement within its borders. States have jurisdiction over media and telecommunications companies operating within their borders, according to Rob Frieden, a professor of telecommunications and law at Penn State University.
"What the Comcasts of the world can do in these deals is quote-unquote voluntarily provide certain concessions that sweeten the deal, make it more in the public interest and more palatable to these regulatory authorities," Frieden says.
Comcast would lose out on 7 million new subscribers if New York acts against the merger, a fact that gives the state a ton of sway in the consolidation talks, along with a new state law the requires cable mergers to offer public benefit. While New York Gov. Andrew Cuomo has been gifted more than $200,000 in campaign contributions from Time Warner and Comcast, other influential voices in the state are looking for concessions that would benefit every New Yorker.
The New York State Public Service Commission is preparing for an Oct. 2 vote on a proposal demanding the preservation of Comcast jobs in New York after the merger, rural expansion of the company's services and lower barriers of entry for low-income families seeking broadband services. The concessions are said to come at a $300 million price tag.
Tim Wu, a candidate for lieutenant governor of New York, said one state's refusal of the merger's terms could have a domino effect, causing other states to fall in line and rip the agreement apart.
"Traditionally these commissions have just extracted goodies from the companies," says Wu. "But I think that if one commission turns on the deal, everyone else will follow."
Roughly 3,000 miles away, California's Public Utilities Commission launched an independent review of the Time Warner-Comcast merger that will lead to the state's official stance on the merger in January 2015. A memo from the commission states the probe seeks to determine how the merger will affect rival companies operating in the state and how it will impact average Californians if Comcast were to be the state's main service provider.
"How would the merger benefit California consumers," the memo states. "For example, will the merger benefit low-income outreach and adoption of broadband services that are accessible, affordable and equitable in a manner that is enforceable and will help close the digital divide? Will the merger help educate consumers on using computers and Internet when service is provided? Will the merged entity offer standalone Internet access and make sure consumers are aware of this offer?"
If the merger takes place, Comcast would control high-speed Internet service to about 40 percent of all homes in the U.S. with broadband service.
