California is close to approving Comcast's proposed acquisition of Time Warner Cable, but state regulators are considering imposing a lot of requirements that Comcast doesn't like.

In addition to seeking federal approval of the $45.2 billion acquisition, Comcast needs the green light in states where Time Warner Cable licenses have to be transferred to the new mothership. A California administrative law judge proposed approval with the list of conditions last month, and now the California Public Utilities Commission (CPUC) has to make a decision.

Comcast laid out its opposition to many of the conditions in a joint filing with Time Warner Cable yesterday.

"[W]e are committed to finding an equitable resolution that avoids the creation of a burdensome single provider regulatory regime while ensuring that the substantial public interest benefits promised by the transaction are realized by Californians," Comcast Executive VP David Cohen wrote in a blog post. "We are confident that we can reach agreement with the CPUC on a regime of appropriate conditions that will protect and enhance the public interest, and we look forward to accomplishing that objective in the coming weeks."

The merger also involves a side deal with Charter.

It’s a long list

"While some conditions may be appropriate to ensure that the public interest benefits of the Transaction will be realized, many of the suggested conditions are unnecessary and inappropriate and should not be adopted," Comcast's rebuttal said.

The table of contents of Comcast's 46-page report gives a sense of just how much the cable company disagrees with California's proposed conditions. Here are the main bullet points as written in Comcast's argument; we've added hyperlinks and additional text in italics to further explain the requirements and Comcast's objections:

The proposed decision improperly expands the scope of the proceeding beyond the commission’s jurisdiction and authority. The proposed decision would impose sweeping common carrier utility type regulation on the merged entity’s broadband and VoIP services in derogation of federal and state law.

Other conditions in the proposed decision exceed the commission’s authority or are otherwise unlawful. [According to Comcast, these conditions include requirements related to Lifeline phone service, diversity, website design standards, backup batteries, video programming, non-interference with competing voice services, buildout requirements, opposition to municipal broadband projects, and privacy complaints.] The proposed decision adopts intervenors’ [merger opponents] flawed analyses and claims regarding market share and competition. The transaction will not increase market power or reduce consumer choice.

The FCC’s new definition of “advanced telecommunications capability” has no relevance to this proceeding. [The Federal Communications Commission recently said that Internet service must provide at least 25Mbps download speeds and 3Mbps upload to qualify as broadband or "advanced telecommunications capability." That decision increased Comcast's "broadband" market share to 56 percent nationwide.]

Concerns regarding future overbuilding are baseless and unsupported by the record. [The question here is whether Comcast and Time Warner Cable would ever compete against each other directly if they cannot merge.]

The transaction presents no risk to edge providers [companies that deliver content and applications over the Internet], the highly competitive internet backbone, or consumers’ access to broadband content. Other factual findings in the proposed decision are invalid and do not support the suggested conditions. TWC is not a “policy competitor” to Comcast. [The California judge's proposal said TWC is a "policy competitor" to Comcast because it has different positions and business models. "For example, Time Warner has applied to the Commission to offer Lifeline as a tariffed service, while Comcast has not," the judge wrote.]

Mandatory diversity measures are unnecessary. [Comcast says California's requirements amount to mandatory race-based quotas that violate state law and the US Constitution.]

Concerns regarding Comcast’s battery backup program and other network safety issues are based on inaccurate assertions.

The transaction will not harm wholesale offerings.

Internet Essentials is successful by any objective metric and the program’s extension to TWC and Charter areas will provide substantial public interest benefits. [Internet Essentials is a low-cost Internet service for the poor that Comcast was required to create in exchange for approval of its 2011 acquisition of NBCUniversal. California wants Comcast to expand program eligibility further than Comcast is willing to. Comcast objects to a requirement to double download speeds from 5Mbps to 10Mbps. California also wants Comcast to achieve a 45 percent adoption rate among eligible consumers, which Comcast says is an unrealistic goal.]

The proposed decision imposes unlawful rate and performance regulations based on inaccurate assumptions about TWC services and is in all events unjustified. [California wants Comcast to offer standalone broadband service for five years at prices not exceeding those charged by Time Warner Cable.]

The proposed decision adopts incorrect data regarding Comcast’s quality of service and network safety and reliability.

The “benchmark” competition theory adopted in the proposed decision is refuted by the record evidence. [California proposes an annual report requirement because the merger would eliminate the commission's ability to compare reliability, customer service, prices, and service offerings of Comcast and TWC.]

Other suggested conditions are unauthorized and unnecessary. [This section further covers a requirement to not interfere with voice services. Comcast says "it is unnecessary because Comcast does not interfere with voice services or degrade customers’ ability to complete calls." This section also addresses a website accessibility requirement, which Comcast says is unnecessary because the company "already offers a comprehensive and user-friendly website that benchmarks to best practices for website accessibility."]

But wait, there’s more

There are some further notes of interest in Comcast's rebuttal. California wants to prevent Comcast from opposing any municipal broadband deployment plan for five years. Comcast argues that this violates the company's Constitutional right to free speech. Municipal broadband has been controversial because numerous states, as favors to private Internet service providers, have restricted the ability of cities and towns to offer their own broadband service. The FCC has begun using its authority to overturn these state laws.

Comcast also objects to a requirement that it "offer all of its California customers the ability to use Roku or other independent video programming platforms, on the same basis that Time Warner did prior to the merger." Comcast did not allow HBO and Showtime to stream on Roku devices until months after Roku complained to the FCC, and it has not allowed HBO Go to work on the PS3 and PS4 despite other Internet providers including Time Warner Cable allowing such access. "The Commission has no authority to regulate video programming," Comcast said.

Comcast also says that California should not have any concerns about a merger eliminating the possibility that Comcast and Time Warner Cable could ever compete head to head or "overbuild" each other's territory. That's because there's no chance the companies will ever compete against each other regardless of whether the merger is completed, Comcast says. "[T]here is simply no record basis to conclude that either firm has ever planned any geographic expansion through overbuilding—or indeed that incumbent cable operators in general build out networks in this way," Comcast wrote. "Comcast and TWC have each determined that it would be both cost-prohibitive and ultimately unprofitable to build new cable systems outside their existing geographic footprints, or to make the major investments necessary to enter each other’s markets as an out-of-footprint OVD [online video distributor]. And neither Comcast nor TWC has any plans to overbuild one another’s current footprints."

The judge's proposal said the merger "would more than double the size of Comcast’s footprint in California, increasing the number of California households served by Comcast from approximately 34 percent to 84 percent." That's the number of homes passed by the Comcast and Time Warner Cable networks rather than their market share. Comcast says it has broadband subscribers in fewer than 40 percent of homes it passes nationwide.

Comcast this week also filed its fourth annual report on its compliance with conditions imposed upon its NBCUniversal acquisition.