Charter Communications, owner of Spectrum, is nearing the completion of its $34.5 billion acquisition of Cox Enterprises. This merger aims to create the largest internet and cable television company in the United States. The California Public Utilities Commission (CPUC) is set to vote on the approval next week, marking the last regulatory hurdle since federal officials approved the deal months ago.
The approval would bolster Southern California’s leading service provider, Spectrum, adding over 5 million customers. Cox, based in Atlanta, services areas like Rancho Palos Verdes and large parts of Orange and San Diego counties. Spectrum covers major regions such as Los Angeles and Riverside counties.
The merger, proposed over a year ago, faces challenges. Public interest groups express concerns over the settlement’s ability to ensure affordable internet for low-income residents, as well as responses to natural disasters like last year’s fires in Eaton and Palisades. They seek commitments from Charter for workplace diversity, equity, and inclusion.
Jason Solomon, from the National Institute for Workers’ Rights, stresses the importance of state regulators in upholding diversity values. The CPUC will consider two proposals; both support the merger but include differing conditions.
“State regulators like the CPUC have an important role to play,” Solomon said, emphasizing the need to uphold California’s laws and policies.
Charter has pledged in the past to maintain a diverse workplace. However, it scaled back under pressure from Trump’s administration, which opposed diversity programs. The FCC chairman at that time also aimed to scrap these initiatives, arguing they were discriminatory.
In February, the FCC approved Charter’s purchase of Cox, subject to conditions protecting against DEI discrimination. While aiming to secure the FCC’s approval, Charter now faces calls in California to reaffirm its diversity commitments. Jessica J. González of Free Press advocates for the preservation of workplace diversity in the state.
In public filings, Charter expressed intent to engage with diverse suppliers and business groups, including women, LGBTQ, African American, Hispanic, and Asian chambers of commerce. The merger promises lower prices and better service.
Concerns arose over a proposal by Commissioner Matthew Baker that omitted diversity efforts and offered weak broadband access provisions. Advocacy groups prefer Judge Jamie Ormond’s proposal, which includes more conditions fostering inclusivity.
Solomon’s group is pushing for structures to ensure equal opportunity compliance. Advocates argue that the CPUC has a duty to deny a deal falling short of public interest. California has previously enforced diversity initiatives, such as in Verizon’s purchase of Frontier Communications.
Both proposals require Charter to provide affordable broadband to low-income residents and support California LifeLine service tiers. Charter agreed to a $275 million network upgrade commitment and a $30 million investment in outreach initiatives. It also pledges free broadband for eligible institutions.
Post-merger, Cox subscribers will transition to Spectrum products and fees, with options for current pricing or new bundles. Charter promises a year of free cellular service upon switching carriers. In a year, the Spectrum brand remains, but the company will rebrand under the Cox name, with the Cox family becoming the largest shareholders.
On an earnings call, Charter CEO Chris Winfrey projected nearly 37 million customers nationwide, with expectations of generating $67 billion in annual revenue.
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