Charter gets OK to obtain Oceanic

Hawaii consumers will receive more Wi-Fi in public places, special broadband Internet service for low-income households and more access to cable TV under a pending deal in which Connecticut-based Charter Communications Inc. would acquire Oceanic Time Warner Cable.

The state Department of Commerce and Consumer Affairs said Friday it approved the acquisition with conditions that will benefit local consumers. Hawaii’s approval gives Charter one regulatory OK in its larger proposed acquisition of Time Warner Cable Inc. operations in 28 states.

The Federal Communications Commission and some other states and municipalities are still reviewing the proposed $55 billion acquisition of New York-based Time Warner, a deal that is tied to Charter buying a second cable provider, Bright House Networks, for $10 billion and merging both companies with Charter operations.

“After an extensive review of the merger transaction application, which included statewide public hearings, we determined that the proposed transfer of Oceanic’s Hawaii cable franchises to Charter, with the conditions imposed on by the state, is in the public’s best interest,” Ji Sook “Lisa” Kim, administrator of DCCA’s Cable Television Division, said in a statement.

Charter issued a statement saying the company is pleased to receive the approval: “As the DCCA recognized, the many benefits of the transaction put it squarely in the public interest. We look forward to bringing those benefits to the people of Hawaii.”

The DCCA’s conditions largely add specifics to the general commitments Charter had made during nine public hearings held on six islands in September.

The agency highlighted five conditions that must be met within three years of the Time Warner deal closing.

One requires that Charter offer more affordable high-speed internet broadband service to seniors over 65 who receive federal Supplemental Security Income benefits as well as families with children participating in the National School Lunch Program. This service would have to provide data transmission speeds up to 30 megabits per second for downloads and 4 megabits per second for uploads at an initial cost of $14.99 a month.

Charter previously said it would provide a new broadband program for low-income consumers in Hawaii, and announced Thursday that the service specified in the DCCA order will have initial rollouts within six months of the Time Warner deal closing. The company said the program is the first to offer fast broadband to seniors and families with low incomes, and that the fastest comparable program today offers a 10-megabit speed.

Another condition requires Charter to invest $10 million to expand its network in Hawaii and connect service lines with at least 1,000 homes that previously had no connection.

Previously, Charter said it would make line extensions to 1 million homes nationally within four years of the Time Warner acquisition and that the number in Hawaii needed to be evaluated upon the deal closing.

Some local consumers complained at the public hearings that they can’t get service or that service is substandard.

“Please ask Charter to upgrade internet services speedily,” Kihei computer professional Chris Mentzel said in written testimony. “Everyday around 5 p.m., the internet slows down from 8 to 1 (megabits per second). Other places in the world have access to gigabit internet, and Maui’s computer users, business and media firms are severely held back by our slow speeds.”

Grammy Award-winning Hawaiian musician George Kahumoku Jr. testified in written comments that he can’t get cable service where he lives at the Cliffs of Kahakuloa.

“Unfortunately, I live in a remote area of Maui where cable TV is not yet available and everything goes through our telephone line with NO band width,” he wrote. “We would welcome any type of cable service to our area.”

Kahumoku and other testifiers also asked that Charter provide free Wi-Fi, live transmission capability and high-speed broadband service to public places such as schools, government buildings, hospitals, libraries, community centers and parks.

The DCCA is requiring that Charter establish 1,000 new public Wi-Fi access points within three years, with 100 of the spots designated by DCCA. However, whether access will be free still needs to be determined, according to DCCA Director Catherine Awakuni Colon. “We have not finished hammering out the details for that,” she said.

Colon said it would make sense for the Wi-Fi to be free to Charter subscribers and could perhaps also be free to nonsubscribers with a time limit.

Another condition is for Charter to change Oceanic’s cable systems to all-digital networks within 30 months.

Charter also would have to provide subscribers with two digital transport adapters, also known as basic boxes, free of charge for at least two years. Providing energy-efficient set-top boxes is another requirement.

“Those cable boxes are real energy hogs,” Colon said.

Charter previously said that it will make the all-digital conversion and deploy what it calls its new Worldbox equipment system, which allows additional simultaneous recordings and increased storage for DVR users while meeting federal Energy Star 3.0 efficiency levels.

To see the DCCA’s decision and other filings in the Charter review case, visit cca.hawaii.gov/catv.