PSC Revokes Charter Merger Agreement
(July 29, 2018) – In a surprise move, the state Public Service Commission announced Friday it’s rescinding its 2016 approval of the merger between Charter/Spectrum and Time Warner Cable. The PSC cited Charter/Spectrum for failing to show it would make good on the conditions of the merger to upgrade and expand its services for unserved and underserved locations.
The PSC accused Charter/Spectrum of repeated failures to meet deadlines, attempts to skirt obligations to serve rural communities, unsafe practices in the field, failure to fully commit to its obligations under the 2016 merger agreement and the purposeful obfuscation of its performance and compliance obligations to the commission and its customers.
The Public Service Commission directed its counsel to file enforcement action on Charter in state Supreme Court.
“Charter’s repeated failures to serve New Yorkers and honor its commitments are well-documented and are only getting worse,” Public Service Commission Chairman John 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.
“Charter’s non-compliance and brazenly disrespectful behavior toward New York state and its customers necessitates the actions taken today seeking court-ordered penalties for its failures and revoking the Charter merger approval.”
The telecommunications company merged with Time Warner Cable under the condition it would expand service to 145,000 unserved and underserved locations statewide by May 2020 at its own expense, and to upgrade speeds for its existing systems to broadband speeds of 100 megabytes per second within a 30-month period after the merger. The deadline was Dec. 31.
Charter/Spectrum announced Tuesday it launched upgrades to its existing system in Columbia County, providing starting internet speeds of 100 MBps with no modem fees, data caps or contracts.
Charter/Spectrum serves customers in Ancram, Austerlitz, Canaan, Chatham, Copake, Ghent, Hillsdale and New Lebanon.
In a statement Friday responding to the PSC’s allegations, Charter/Spectrum defended its record since the merger agreement.
“In the weeks leading up to an election, rhetoric often becomes politically charged,” according to Charter/Spectrum. “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.”
The PSC’s order requires Charter/Spectrum to file within 60 days a plan with the commission to ensure an orderly transition to a successor provider. During that time, the company must continue to comply with all local franchises it holds, all obligations under Public Service Law and commission regulations and must ensure no interruption in service is experienced by customers.
The future of broadband in columbia county
Local town supervisors, whose towns are served by Charter/Spectrum, said it was important for the company to be penalized, but now they are left wondering what will be the future of broadband in their areas.
“I had a meeting with the state broadband office on June 28 and I told them I fully support any fine against Charter, but my worst fear was that New York would pull their license,” said Ghent Town Supervisor Michael Benvenuto. “Where does this leave us? We’re back at square one.”
The rescission of the merger approval does not mean Charter cannot operate in the state where it already served customers. Charter will no longer have control of territory once covered by Time Warner Cable.
Multiple of the towns in Columbia County with large areas covered by Charter/Spectrum have received complaints from local customers about the company’s roll out of upgrades in service and customer service issues, including Ghent and New Lebanon.
“Hopefully Charter will realize it has to do better,” Benvenuto said. “Maybe this is like a two-by-four to the head for Charter and it will get worked out. We will have to see.”
Local officials met with Illinois-based Consolidated Communications Inc., which merged with FairPoint Communications in June 2017, to discuss the company’s plans to provide a new television product in the local area as it works to expand its service with grants acquired through the New York Broadband Program.
The prospect of Consolidated providing a viable alternative to Charter provides competition at locations that still lack in broadband coverage.
“Charter’s expansion was so monumental to Columbia County and went right to what the governor’s initiative was about,” New Lebanon Town Supervisor Colleen Teal said. “I am not sure if this is a good, or bad thing. The company needed a nice little kick.”
The New NY Broadband Office based its plans for expanding broadband in Columbia County and other areas where Charter reigns around the companies possible coverage area, but the company was allowed to hide their buildout plans as trade secrets.
“The buildout through the initiative was based on a ball game Spectrum was not playing in,” Teal said. “But, Spectrum’s plans were a major part of the broadband office’s plan. What will happen to that 10 percent of coverage that Spectrum was going to buildout?”