Citing “non-compliance,” New York tells Charter-Spectrum it’s no longer welcome to operate in the state

ALBANY, N.Y. — The New York State Public Service Commission (PSC) on Friday revoked its approval of the 2016 merger agreement between Charter Communications, Inc. (NASDAQ: CHTR) and Time Warner Cable, Inc.

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 New York.

Stamford, Connecticut–based Charter, which does business as Spectrum, “has — through word and deed — made clear that it has no intention of providing the public benefits upon which the commission’s earlier approval was conditioned,” the PSC contended in a news release issued Friday afternoon.

In addition, the PSC will seek additional penalties for Charter’s “past failures and ongoing non-compliance.” The PSC will file the enforcement action Friday in State Supreme Court in Albany.

With its decision, the PSC determined that Charter “failed to deliver the benefits to New Yorkers that were at the core of the merger approval.” The various instances of “misconduct” include the company’s repeated failures to meet deadlines; Charter’s attempts to skirt obligations to serve rural communities; “unsafe” practices in the field; its “failure” to fully commit to its obligations under the 2016 merger agreement; and the company’s “purposeful obfuscation of its performance and compliance obligations to the commission and its customers.”

The PSC has ordered Charter to file a plan with the commission within 60 days to “ensure an orderly transition to a successor provider(s).” During the transition process, Charter must continue to comply with all local franchises it holds in New York and all obligations under the Public Service Law and PSC regulations.

The PSC on June 14 threatened Charter with the “the risk of having the merger revoked,” when it ordered Spectrum to pay two $1 million fines and ordered that the company unequivocally accept the terms the state set in 2016 for the merger of Time Warner Cable and Charter, the PSC said in a release that day.

Charter reaction

Charter Communications provided BJNN with this statement in reaction to the PSC decision.

“In the weeks leading up to an election, rhetoric often becomes politically charged. 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,” said Andrew Russell, director of communications for the northeast region.

Lawmaker reaction

At least one New York lawmaker has weighed in on the PSC’s decision. In a statement, New York State Assemblyman Anthony Brindisi (D–Utica) says it’s “high time New York cut the cord” with Spectrum Cable and provided residents with more competition.

“Over the past several years, I have heard from literally hundreds of constituents who have called me and signed my online petition, and they are absolutely fed up. They’ve had it with poor customer service; sudden surprise rate hikes they cannot afford; and promises that are not being kept by Spectrum. What is just as bad is that thousands of New Yorkers who are waiting for the broadband access Spectrum keeps advertising it is providing are still stuck with 20th century technology. 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.”

Contact Reinhardt at ereinhardt@cnybj.com