Regulators in New York say they are revoking their approval of Charter's 2016 merger with Time Warner Cable due to Charter's alleged failure to meet the merger conditions, including a promise to extend broadband service to rural parts of the state.
“Charter's repeated failures to serve New Yorkers and honor its commitments are well documented and are only getting worse," John Rhodes, chair of the New York Public Service Commission, stated Friday. “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.”
Regulators have told Charter to submit a plan within 60 days for an orderly transition to a different provider. "Charter must ensure no interruption in service is experienced by customers, and, in the event that Charter does not do so, the Commission will take further steps, including seeking injunctive relief in Supreme Court in order to protect New York consumers," regulators said.
Charter, which offers service under the name Spectrum, reportedly plans to fight the commission's decision. "In the weeks leading up to an election, rhetoric often becomes politically charged,” the company said in a widely circulated statement. “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.”
To gain approval for the $55 billion merger, Charter promised to offer broadband service at speeds of 100 Mbps throughout the state by the end of this year, and 300 Mbps by the end of 2019. Charter also promised to extend service to 145,000 new homes and businesses in areas of the state considered "un-served or under-served."
Regulators said Friday that Charter had "repeatedly" met deadlines, and attempted to "skirt obligations to serve rural communities."
The commission added that it has referred a false advertising claim to the Attorney General, because Charter "falsely claimed in advertisements it is exceeding its commitments to the state and is on track to deliver its network expansion."
The advocacy group Public Knowledge cheered news of the regulators' move. “All New Yorkers deserve fast, reliable broadband," John Bergmayer, senior counsel, stated. "Charter’s merger commitments in New York were designed to help bring that about. With this enforcement action, it’s good to see the New York Public Service Commission taking them seriously.”
New York's Attorney General is already pursuing a false advertising claim against the company stemming from allegations that Time Warner Cable duped consumers by delivering slower-than-advertised broadband speeds. That matter has been pending since February 2017.