With its decision, the Commission 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.
These recurring failures led the Commission to the broader
conclusion that the company was not interested in being a good corporate
citizen and that the Commission could no longer in good faith and conscience
allow it to operate in New York. Today’s actions are meant to address Charter’s
failings and to ensure New York has a partner interested in the public good,
not just lining its pockets.
“Charter's repeated failures to serve New Yorkers and honor
its commitments are well documented and are only getting worse. 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,” said Commission Chair John B. Rhodes.
“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.”
On Jan. 8, 2016, the Commission approved Charter’s
acquisition of Time Warner. To obtain approval, Charter agreed to a number of
conditions required by the Commission to advance the public interest, including
delivering broadband speed upgrades to 100 Mbps statewide by the end of 2018,
and 300 Mbps by the end of 2019, and building out its network to pass an
additional 145,000 un-served or under-served homes and businesses in the
State's less densely populated areas within four years of the closing of the
transaction.
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. Since that time,
however, not only has Charter’s performance been wholly deficient and its
behavior before the Commission contrary to the laws of New York State and
regulations of the Commission, but it has also repeatedly claimed not to be
bound by the terms of the Commission's approval. Such egregious conduct cannot
be condoned and the only reasonable remedy that remains is for the Commission
to revoke the 2016 merger approval and order Charter to plan for an orderly
transition to a successor provider(s) to serve its New York State customers.
Since the merger, Charter has repeatedly failed to meet its
commitments to the State, including its obligation to timely extend its
high-speed broadband network to 145,000 unserved and underserved homes and
businesses in less densely populated areas of the State. As a result of
Charter's adamant refusal to abide by the conditions of the merger approval,
the Commission ordered Charter to develop a transition plan. To ensure that
Charter's customers are not negatively affected during that process, the
Commission further ordered the company to maintain service to the company’s
more than 2 million customers in New York until an orderly transition occurs.
By its own admission, Charter has failed to meet its
commitment to expand its service network that was specifically called for as
part of the Commission’s decision to approve the merger between Charter and
Time Warner Cable. Its failure to meet its June 18, 2018 target by more than 40
percent is only the most recent example. Rather than accept responsibility
Charter has tried to pass the blame for its failure on other companies, such as
utility pole owners, which have processed tens of thousands of pole
applications submitted by Charter.
The Commission rejected Charter’s “good cause” claims as
part of the orders issued today. Consequently, the Commission directed that
Charter pay $1 million to the State Treasury for missing the June milestone,
bringing the total amount of payments ordered by the Commission to $3 million,
and directed the Commission’s counsel to bring an enforcement action in State
Supreme Court to seek additional penalties for Charter's past failures and
on-going non-compliance. Despite missing every network expansion target since
the merger was approved in 2016, Charter has falsely claimed in advertisements
it is exceeding its commitments to the State and is on track to deliver its
network expansion. This led to the Commission’s general counsel referring a
false advertising claim to the Attorney General’s office for enforcement.
Charter is ordered to file within 60 days a plan with the
Commission 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 State and all obligations under the Public
Service Law and the Commission regulations. 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. Charter is the
largest cable provider in the State. It provides digital cable television,
broadband internet and VoIP telephone service to more than two million
subscribers in New York State in more than 1,150 communities, with a potential
customer base of five million households in its franchise areas. The company provides
cable television, Internet and telephone service in the major metropolitan
areas of the State: Buffalo, Rochester, Syracuse, Albany and the boroughs of
Manhattan, Staten Island, Queens and parts of Brooklyn.
