Frustrated by alleged intransigence by Charter Communications following its acquisition of Time Warner Cable, New York State regulators today voted unanimously to rescind their 2016 approval of the deal — a step that could force the company out of New York. The vote has the potential to impact cable and internet services for millions of customers.
According to regulators from the New York State Public Service Commission (PSC), Charter has failed to fulfill expansions of its broadband service that were mandated by the state in approving the deal. Charter agreed to improve New York broadband speeds to 100 Mbps by 2018’s end, then 300 Mbps by the end of 2019, as well as expanding service to 145,000 underserved homes and businesses within four years of closing the deal.
Regulators say that Charter not only missed multiple deadlines for service expansion, but stonewalled and misled investigators who were attempting to verify its compliance. Saying that the company’s behavior was only worsening over time, the PSC determined that Charter was “not interested in being a good corporate citizen,” and cited five key points in reaching its decision.
- The company’s repeated failures to meet deadlines;
- Charter’s attempts to skirt obligations to serve rural communities;
- Unsafe practices in the field;
- Its failure to fully commit to its obligations under the 2016 merger agreement; and
- The company’s purposeful obfuscation of its performance and compliance obligations to the Commission and its customers.
In a statement, PSC chairman John B. Rhodes said:
After more than a year of administrative enforcement efforts to bring Charter into compliance with the Commission’s merger order, the time has come for stronger actions to protect New Yorkers and the public interest.
The “stronger actions” range from serious to trivial. Most notably, Charter must now produce a plan within 60 days to dispose of its Spectrum-branded New York assets, presumably by selling them off to another company. It must also take steps to guarantee that there’s no disruption of service to New York customers during the transition. Regulators are also commencing a lawsuit against Charter to recover modest civil penalties.
Charter blamed election-year politics for the vote, claiming that it had taken major steps under the merger agreement. “Spectrum has extended the reach of our advanced broadband network to more than 86,000 New York homes and businesses since our merger agreement with the PSC,” it said in a statement. “Our 11,000 diverse and locally based workers, who serve millions of customers in the state every day, remain focused on delivering faster and better broadband to more New Yorkers, as we promised.”
It’s unclear whether the company will be able to reverse the decision by reaching a deal with New York, appeal it through the courts, or walk away in favor of a sale to another company. Charter has indicated, however, that it intends to fight the order in some way.