Cox-Charter merger clears final hurdle with equity commitments

Charter Communications and Cox Communications are one step closer to merging and becoming the country’s largest cable company by customer base.

On Aug. 13, the California Public Utilities Commission (CPUC) issued a statement that the companies agreed to a series of equity measures, including providing affordable broadband options and five years of free internet for community institutions like libraries and community centers, and investing in workforce development through programs like VetConnect.

The expanded company will operate in 454 states. California, the final state to sign off on the merger, also required the company to share workforce diversity data, according to the Wall Street Journal.

Advocacy groups, including Just Solutions and LatinoJustice PRLDEF, had mixed reactions to the agreement.

“We’re disappointed that the Commission backtracked from their own precedent in the Verizon merger of holding companies to account on equal opportunity,” Jason Solomon, director of the National Institute for Workers’ Rights, said in a statement. “This is a time to stand up to the federal government on important values, not look the other way.”

The $34.5 billion merger (through which Charter will take on $12.6 billion of Cox’s debt) was approved by the Federal Communications Commission (FCC) in February, when the companies promised that they “modified its [DEI] practices and is committed to a work environment free from invidious discrimination,” Reuters reported.

Charter also agreed to pay workers at least $20 an hour and to onshore jobs.

“With the final regulatory approvals in place, we are extremely pleased to announce that we expect to close our transaction with Cox Communications next week; and look forward to welcoming Cox employees to the Spectrum team,” Cameron Blanchard, a spokesperson for Charter, told HR Brew in a statement.

The FCC did not respond to HR Brew’s requests for comment.

Verizon also made a deal with the CPUC for its merger with Frontier Communications earlier this year, HR Brew reported at the time. That agreement went further with DEI commitments, and Verizon promised to establish a $10 million workforce development program. (A judge had previously ordered Verizon to create a talent pipeline for “underrepresented populations.”)

“Both the federal and state regulators need to recognize that companies can calibrate in such a way that they’re not discriminating against anyone, while still promoting equal opportunity,” Solomon told HR Brew in January. “There’s going to continue to be dilemmas, faced by companies, that they have to worry not just about the risk from the federal government and not just from the risk from the state regulator, but they all have to be worried about the risk that if, they back too far from back away from commitments to equal opportunity, under pressure from the federal government, that they will be sued.”

FCC Commissioner Brendan Carr has targeted companies with DEI programs, threatening to block mergers and acquisitions among those that don’t abandon their practices, Bloomberg reported earlier this year.

However, some Congressional leaders have complained that Carr hasn’t provided context on what is considered DEI.

“We directly asked what definition or standard the commission uses to determine what constitutes an ‘invidious form’ of diversity, equity and inclusion,” Rep. Jennifer McClellan of Virginia, said in a June letter. “His reply provided no answer to that question and instead implied that all DEI programs are racial discrimination by default.”

The Cox deal is expected to close later this month.