Charter-Oceanic Merger ‘Conditionally’ Approved

The merger transaction between Oceanic Time Warner Cable LLC’s six local cable franchises and Charter Communications, Inc. was conditionally approved by the state Department of Commerce and Consumer Affairs’ Cable Television Division, as announced by the state Friday.

The application for transfer of control of Oceanic’s cable franchises throughout Hawai’i was filed in July and was followed by DCCA public meetings on the merger.

Charter currently provides entertainment and communications services to approximately six million customers in 28 states.

“After an extensive review of the merger transaction application, which included statewide public hearings, we determined that the proposed transfer of Oceanic’s Hawai’i cable franchises to Charter, with the conditions imposed on by the state, is in the public’s best interest,” said CATV Administrator Ji Sook “Lisa” Kim. “As outlined in the Decision and Order, Charter is committed to improving cable networks in Hawai’i and providing a low cost broadband service for Hawai’i’s low-income consumers.”

The Decision and Order included numerous requirements including, the following:

Provide a broadband service for low-income consumers in Hawai`i (providing families with children participating in the National School Lunch Program and seniors, age 65 and older who are eligible and receive federal Supplemental Security Income benefits, with broadband service initially for $14.99/month, at speeds up to 30 Megabits per second (Mbps) download, and 4 Mbps upload) within three years of the close of the merger transaction.

Invest $10,000,000 to build out its networks in Hawai`i, and build out 1,000 new line extensions of its networks to homes in its Hawai`i cable franchise areas within three years of the close of the merger transaction.

Provide 1,000 new public WiFi access points within three years of the close of the merger transaction. One-hundred of these new access points would be deployed at public parks, civic and community centers, and other public open areas and gathering places at the direction of DCCA.

Within 30 months after the close of the merger transaction, transition virtually all of OTWC’s cable systems to all-digital networks and, upon the conversion, Charter/OTWC shall provide subscribers, among other things, two (2) digital transport adaptors or “basic boxes” free of charge for a period of two (2) years and make them available at OTWC’s customer service centers and delivery by mail (including pre-paid return service).

Promote and make available energy efficient set-top boxes (within three years of close of merger transaction, at least 90% of newly deployed boxes shall meet energy star requirements), and Charter/OTWC is encouraged to:  (1) partner with community organizations to educate and promote the use energy efficient set-top boxes; and (2) develop an economically feasible program to trade out old boxes with efficient ones.

The merger and transfer of Oceanic’s Hawai’i franchises will not take place until federal regulatory review of the merger transaction is completed. As of Friday, the Federal Communications Commission is on its 98th day of review of the Charter and TWC merger.

Decision & Order No. 366, giving DCCA’s conditional approval for the merger, can be viewed on the DCCA’s website.