Cox/Charter Settlement Would Protect Californians from Higher Broadband Prices

Broadband customers often pay more when they have fewer choices. That concern is particularly relevant as Charter Communications (operating as Spectrum) and Cox Communications seek authority to merge. Nationally, the proposed transaction would combine the two companies into one entity with 38 million subscribers across 41 states. In California, the transaction would combine two of the state’s largest cable providers, leaving many households with just one option for gigabit-level broadband service.

To help protect Californians from higher prices if the merger moves forward, the Public Advocates Office successfully negotiated a settlement agreement with the applicants that includes critical consumer pricing protections. If adopted by the California Public Utilities Commission (CPUC), the settlement terms would expand and enhance low-cost broadband options and cap promotional prices – terms that would secure up to $1.9 billion in savings for Californians. The full settlement agreement builds on the strong consumer affordability protections secured through the Public Advocates Office’s recent settlement agreement in the Verizon–Frontier merger.

New Low-Cost, High-Speed Broadband Services for Low-Income Customers

The settlement agreement would establish several new pathways for qualifying customers to obtain free or low-cost broadband service.

First, Charter would offer new California LifeLine service commitments. Charter would also provide an improved low-income broadband offering that does not require LifeLine enrollment.

New California LifeLine Service Commitments. For a minimum of five years, Charter would offer two standalone broadband services and two bundled broadband and voice options through the California LifeLine Pilot Program. With the current LifeLine subsidies of $20 per month for broadband service and $30 per month for bundled service, eligible customers would have access to multiple plans with monthly out-of-pocket costs ranging from $0 to $30.

Improved Low-Income Broadband Offering. For a minimum of five years, Charter would also offer a standalone 100/20 Mbps broadband plan, outside of LifeLine, to any qualifying customer for $20 per month. Eligibility would be determined through verification of enrollment in specified government assistance programs.¹

These are critical settlement terms. Low-income Californians are particularly vulnerable to the negative consequences of reduced competition among internet service providers. Today, Charter does not offer a low-income product that provides the 100/20 Mbps speeds included in the settlement. If the settlement is approved, the New California LifeLine Service Commitments and the improved Low-Income Broadband Offering would help ensure that low-income Californians have access to affordable, high-speed internet service that can meet their household needs.

Promotional Pricing Caps for all Californians

Under the settlement agreement, Charter would cap its statewide promotional prices at current rates for three years: $30 for 100 Mbps, $50 for 500 Mbps, and $70 for 1 Gbps, subject to lower-priced exceptions defined in the settlement agreement.² In addition, statewide promotional pricing would be adjusted to maintain a maximum $15 difference between promotional pricing in competitive and non-competitive areas.

Promotional pricing caps are essential to protect consumers against price hikes resulting from consolidation. Our recently published broadband competition report shows that customers in areas with fewer high-speed internet providers pay more for the same internet service than customers in areas with greater competition.³ If adopted, the negotiated price caps would make California the first state to implement broadband pricing protections designed to protect all customers from excessive pricing disparities.

The Settlement Terms Offer Significant Benefits to Californians

The consumer benefits negotiated in the settlement agreement could provide significant savings to low-income households and customers across the new Charter footprint.

Compared to current pricing for similar service tiers, the new LifeLine offerings could provide savings between $597 and $3,600 over the five-year term for each of the more than 400,000 estimated eligible households in the combined company’s service area.⁴ These plans represent an opportunity for eligible low-income households to collectively save up to $1.3 billion over the course of the five-year term.

In addition, the promotional pricing caps could generate monthly savings of approximately $15 and $35 for gigabit customers in Charter’s and Cox’s service areas, respectively. Applying these savings to approximately 2.6 million locations where post-merger Charter would be the sole gigabit-capable provider, the terms have the potential to generate annual consumer savings of up to approximately $596 million.

These settlement terms would provide critical pricing protections for consumers, including low-income Californians. The Public Advocates Office urges the CPUC to adopt the settlement agreement at its August 13, 2026, voting meeting.