Calif. judge recommends Comcast-Time Warner deal - with conditions

A California judge has recommended that state regulators approve Comcast Corp.'s proposed acquisition of Time Warner Cable Inc., a first for the megadeal by a major government entity.

But the recommendation comes with a list of conditions that would tighten regulation on the Philadelphia cable-TV giant and expand its discounted broadband service for low-income families.

Comcast's $10-a-month discounted service, available nationally in Comcast cable franchise areas, is now restricted to poor families with schoolchildren.

Administrative Law Judge Karl J. Bemesderfer proposed Friday that Comcast target all low-income households in California, or those with incomes below 150 percent of federal poverty level, for the service, called Internet Essentials.

Bemesderfer also said Comcast should enroll 45 percent of eligible California households in Internet Essentials within two years of the Comcast/Time Warner Cable's deal closing. Comcast, he added in the decision, should spend $275 per eligible household on marketing it so people know about it.

Critics have said that few low-income families know the program exists, and Comcast has said that it is difficult to get low-income families to enroll in Internet Essentials and that its competitors do not offer similar discounted services for low-income subscribers.

Comcast serves the Silicon Valley and Northern California. Time Warner Cable serves Los Angeles and Southern California.

Mary Anne Ostrom, spokeswoman for the nonprofit California Emerging Technology Fund, which lobbied for conditions, said the group was pleased with Bemesderfer's decision.

"We are having a strategy meeting in the next hour to make sure these recommendations hold," Ostrom said earlier this week.

Comcast executive vice president David Cohen wrote in a blog post last week that Bemesderfer's decision was an "important step" in the regulatory process. But he added that some conditions could intrude on the company's business or were unrealistic.

"Some of the penetration rates and time frames suggested by the conditions are simply unattainable under market conditions, especially with populations that have been slowest to adopt broadband," Cohen wrote.

Bemesderfer's other conditions concerned diversity in Comcast/Time Warner Cable sourcing of goods and services, backup batteries for new Comcast/Time Warner Cable subscribers with Internet-connected phone service, and customer satisfaction.

The California Public Utilities Commission could vote on Bemesderfer's decision at its March 26 meeting.

The Comcast/Time Warner Cable deal, announced last February, also is under regulatory review by the Justice Department, the Federal Communications Commission, and New York regulators.