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Charter Communications faces New York ban

July 30, 2018

Charter Communications, the largest cable provider in New York, could be barred from operating in the state after regulators sanctioned the company for allegedly violating an agreement tied to its $55 billion acquisition of Time Warner Cable.

New York state’s Public Service Commission announced last Friday it had revoked its approval of the 2016 merger and fined Charter another $1 million. The commission accuses the Stamford-based company of consistently failing to meet deadlines, trying to avoid commitments to rural communities, carrying out unsafe field practices and making misleading statements about its performance and compliance requirements.

“Charter’s repeated failures to serve New Yorkers and honor its commitments are well documented and are only getting worse,” John B. Rhodes, the commission’s chairman, said in a statement. “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.”

In a statement, Charter disputed the commission’s allegations and said it had extended the reach of its broadband network to more than 86,000 New York homes and businesses since the PSC approved the merger.

“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,” the statement added.

Charter’s approximately 2 million New York customers would not lose their service. The panel ordered the company to maintain access for its subscribers — who receive cable, internet and phone services under the Spectrum brand — while it filed within the next 60 days a plan for an “orderly transition” to another provider.

The commission based its January 2016 approval of Charter’s acquisition of TWC on a number of conditions. Those terms included delivering broadband speed upgrades to 100 megabits-per-second statewide by the end of this year and 300 MBPS by the end of 2019. The commission also stipulated that Charter build out its network to cover an additional 145,000 unserved or under-served homes and businesses in less-populated areas within four years of the deal’s closing.

“Since that time, however, not only has Charter’s performance been wholly deficient and its behavior before the commission contrary to the laws of New York state and regulations of the commission, but it has also repeatedly claimed not to be bound by the terms of the commission’s approval,” the commission said in a statement.

In addition to the $1 million fine for missing a June deadline, adding to another $2 million penalty it handed down last month. The commission said it is pursuing other sanctions against the company in the state’s Supreme Court.

Last September, the commission approved a $13 million settlement — the state’s largest-ever with a cable provider — after it said the company failed to build out its cable network as required in the 2016 agreement.

At the same time, Charter faces a lawsuit from New York Attorney General’s Office asserting that since January 2012 the company has defrauded and misled customers by falling short of promises to internet subscribers.

Charter denies the allegations. In February, the court dismissed a motion by the company to dismiss the complaint.

Meanwhile, the company is grappling with a 16-month strike by hundreds of New York City technicians protesting proposed contract terms.

As a result of its acquisition of TWC and concurrent purchase of Bright House Networks, Charter in 2016 became the country’s second-largest cable provider, after Philadelphia-based Comcast.

Charter now serves nearly 26 million residences and about1.6 million small- and medium-sized businesses. In the first quarter of this year, its total customer base grew about 3 percent from a year ago.

pschott@scni.com; 203-964-2236; twitter: @paulschott

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