Published: Mon, July 30, 2018
Markets | By Erika Turner

New York State Bans Charter, Citing Continuous 'Instances of Misconduct'

New York State Bans Charter, Citing Continuous 'Instances of Misconduct'

Today, the New York Public Service Commission has revoked its previous approval of the Charter/Time Warner Cable merger, finding among other things that Charter has failed to meet its broadband buildout requirements.

Concluding that Charter "was not interested in being a good corporate citizen" and that the Commission could no longer allow it to operate in NY, the PSC stated its actions address the failings and are meant "to ensure NY has a partner interested in the public good, not just lining its pockets". It determined that Charter failed to deliver the benefits to New Yorkers that were "at the core of the merger approval". ". The commission has previously directed Charter to cease its misleading campaign and has referred the matter to the NY attorney general for appropriate action".

The commission alleged that Charter did not provide the public benefits to the state of NY on which the approval was granted and also said it would seek additional penalties for Charter's past failures and ongoing non-compliance.

The commission said it will begin a special proceeding or action in the New York State Supreme Court to seek penalties for Charter's violations. 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.

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This past June, the commission said that of the claimed new service locations, there were 3,044 addresses in "upstate NY cities that are presumed to have Charter network already available" and another 6,612 addresses that, under and agreement, were not to be included in the build-out. The cable company completed its $67 billion purchase of Time Warner Cable and Bright House Networks in May 2016.

Shares of Charter (chtr) initially fell more than 2% on the news, but quickly recovered. "But the fact is that Spectrum has extended the reach of our advanced broadband network to more than 86,000 NY homes and businesses since our merger agreement", Andrew Russell, director of communications for the company's Northeast branch, said in an email. According to the commission, Spectrum has blown past every network expansion target since the merger, while falsely claiming to customers that it is exceeding these commitments. During the transition process, Charter must continue to comply with all local franchises it holds in the state and all obligations under the Public Service Law and the Commission regulations, and must ensure no interruption in service is experienced by customers.

It's unclear which company would step in to provide service for New Yorkers if Charter is forced to cease operations in the state. "I am pleased that the PSC is taking these serious concerns to heart, and is looking out for the hundreds of thousands of Spectrum customers across the state being shortchanged when it comes to cable and Internet service".

Find the entire decision, go to www.dps.ny.gov, choose "Commission Documents" and enter Case Number 15-M-0388 in the box labeled "Search for Case/Matter Number".

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