Charter will have to stop operating the cable systems in New York state it purchased from Time Warner Cable because the state has now rescinded its okay on the Charter-Time Warner deal.
At least that is according to the New York State Public Service Commission, which concluded Friday (July 27) that the cable operator had failed to comply with the network expansion condition the state put on the deal, as well as related matters in which it was "deficient."
The commission said that Charter's "behavior before the commission" was contrary to public policy and the laws of the state, and serious enough for the state to pull the plug.
The move comes after the state and cable operator had been tussling over how Charter was complying with the condition.
“In the weeks leading up to an election, rhetoric often becomes politically charged," said Charter spokeswoman Tamara Smith. "But the fact is that 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. 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.”
Charter is likely to challenge the ruling, and to continue to provide service in the interim.
The commission said it was "revoking and rescinding its approval of the deal and Charter must "cease its operations in New York State previously served by Time Warner Cable."
It also said that order was "the culmination of the Commission’s repeated, and ultimately unsuccessful, efforts to address through administrative remedies the Company’s chronic misses on the Network Expansion Condition and Charter’s persistent actions demonstrating bad faith."
The network expansion condition required Charter to "to expand the Company’s network to “pass” an additional 145,000 “unserved” (download speeds of 0-24.9 Megabits per second (Mbps)) and “underserved” (download speeds of 25-99.9 Mbps) residential and/or business units within less populated areas of New York (the Network Expansion Condition).
The expansion was to have been achieved in phases. The state says Charter failed to build out the requisite 36,250 premises by May 18, 2017. The state and Charter reached a settlement for that underperformance, but now the state says Charter has failed to meet its buildout targets--the commission disallowed some of the addresses Charter said had been reached--though Charter has told the commission it did not believe it has "disavowed" its commitments to the state.
"In addition to Charter’s repeated violations of the Approval Order’s Network Expansion Condition and the Settlement Agreement, the Company continues to obscure and obfuscate its actual performance," the commission said.
The order denies a Charter request for a rehearing and revokes the state's Jan. 8, 2016, approval of the Time Warner Cable deal.
“All New Yorkers deserve fast, reliable broadband, and Charter’s merger commitments in New York were designed to help bring that about," said Public Knowledge senior counsel John Bergmayer. "With this enforcement action, it’s good to see the New York Public Service Commission taking them seriously.”
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