Charter Might Be Kicked out of NY

The State Public Service Commission has revoked its approval of the Charter-Time Warner merger despite the merged company's arguments that it has exceeded benchmarks for extending wireless Internet access to unserved areas. In response to the decision by the commission, Charter noted that it had extended its reach to "more than 86,000 NY homes and businesses", which is objectively less than 145,000.

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".

NY has given Charter Communications 60 days to stop operating within the state's borders.

"Charter's non-compliance and brazenly disrespectful behavior toward NY state and its customers necessitates the actions taken (Friday) seeking court-ordered penalties for its failures, and revoking the Charter merger approval".

"In approving the transaction, the Commission stated that the merger must yield positive net benefits, after balancing the expected benefits properly attributable to the transaction offset by any risks or detriments that would remain after applying reasonable mitigation measures", the release said. "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".

Shares of Charter (chtr) initially fell more than 2% on the news, but quickly recovered.

With its decision, the PSC determined "Charter failed to deliver the benefits to New Yorkers that were at the core of the merger approval".

The Federal Communications Commission in May 2016 voted to approve Charter's acquisition of Time Warner Cable Inc. and Bright House Networks, so the PSC's Friday decision means Charter is no longer welcome to operate in NY.

The State considers roughly a quarter of those do not meet the standards set in the PSC's 2016 merger approval conditions. The PSC's statement rejects that argument as passing the blame - and ultimately rejected the "good cause" claims.

The commission ordered Charter to pay the state $1 million for missing the June milestone; that brings the total assessed by the PSC to $3 million.

In the short term, Spectrum must continue to operate uninterrupted for the next 60 days while the state finds an acceptable replacement service provider. "This led to the commission's general counsel referring a false advertising claim to the attorney general's office for enforcement". The company must also work with whatever service provider the state of NY selects to replace Spectrum of Charter Communications, which is even further punishment for the various wrongdoings Spectrum committed over the past few years.

Charter is the largest cable provider in the state.

Spectrum provides cable TV, internet and phone service to a wide swath of the Mid-Hudson Valley.

It remains to be seen if other states will follow New York's example in attempting to hold broadband providers accountable for their service to residents across the United States.

  • Eleanor Harrison