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Charter Ordered to Pay $2M Fine, Faces Other Sanctions from NY PSC

The New York State Public Service Commission has fined Charter Communications $2 million and threatened other sanctions on the cable operator for failing to keep its promise to extend broadband service to 145,000 underserved homes and  businesses in the state, part of the conditions of approval of its 2016 merger with Time Warner Cable.

Related: Charter Time Warner Cable Deal Closes 

The New York PSC signed off on the Charter-Time Warner Cable deal in January 2016. Among the conditions of that approval, Charter promised to extend broadband service to 145,000 unserved and underserved homes and businesses throughout the state. 

Related: New York State Approves Time Warner Cable Deal  

But the PSC rejected more than 18,000 addresses in cities throughout the state -- including 12,467 in New York City and 4,096 in the cities of Buffalo, Rochester, Syracuse, Schenectady, Albany, and Mt. Vernon — to which Charter claimed it expanded its network as part of its required buildout requirement. According to the PSC, those addresses already were passed by Charter or another company providing high speed broadband, or were addresses Charter was separately required to pass as part of state regulations and/or franchise agreements. As a result, the PSC said Charter must remove the rejected addresses and file a revised buildout plan within 21 days.

Charter has claimed that it is meeting all of its obligations.

“Spectrum has expanded its network infrastructure to bring broadband to tens of thousands of residences and businesses in New York State; we exceeded our last commitment and we continue to meet our merger obligations,” Charter said in a statement.

In a statement, New York PSC chairman John Rhodes said that “since the company has taken the unfortunate position of refusing to adhere to all conditions set forth in our initial decision two years ago, we now demand the company unconditionally accept all of the conditions as the commission unambiguously required in 2016, or run the risk of more severe consequences.”

Related: Charter Agrees to Pay $13M Fine to NY PSC 

This is the second time that Charter has been fined for missing a broadband benchmark. In June 2017, Charter was fined $13 million by the New York PSC for failing to meet broadband requirements. 

"Access to broadband is the great equalizer in today's society. For rural and upstate communities to be economically and socially competitive, they need broadband coverage and the access and opportunities it provides,” said Dani Lever, press secretary for New York Gov. Andrew Cuomo, in a statement. “That is why the state has established the goal of 100% Broadband for All and has committed $500 million to make that a reality. It is also why the Public Service Commission expressly conditioned its approval of the acquisition of Time Warner Cable by Charter Communications in 2016 on Charter's commitment to bring broadband coverage to 145,000 customers in less densely populated areas of the State.

"Regrettably, rather than honor its commitment, Charter, doing business in the state under the name Spectrum, has repeatedly failed to meet its obligations, particularly to rural areas, where building out broadband is more expensive,” Lever continued. “It has also engaged in a campaign to deceive the public into believing that it is exceeding its commitment to the state through misleading advertising about its performance. The Public Service Commission represents and serves the people of New York. It should not be intimidated by a media giant interested only in its profits rather than the well-being of the people."