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New York State Votes To Kick Charter Out Of The State For Poor Service, Failing To Meet Merger Conditions

from the goes-around-comes-around dept

In an unprecedented move, the New York State Public Service Commission has voted 4-0 to kick Charter out of the state. According to the announcement (pdf) by the PSC, Charter has been given sixty days to file a plan with the PSC that will “ensure an orderly transition to a successor provider,” including offloading the Time Warner Cable territories acquired in the merger. The PSC also notes the vote was only taken after more than a year of trying to get Charter to adhere to some pretty modest broadband build-out requirements affixed to the deal:

“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.”

As noted previously, the state has been trying unsuccessfully for more than a year to get Charter to actually comply with merger conditions. Among them was the promise to expand broadband availability to around 149,000 homes across New York State, something Charter not only didn’t do, but actively misled regulators into thinking had already been completed. In part, by claiming older, existing expansions were new builds.

If you follow telecom (or other major megamergers) for any amount of time, you’ll quickly find that most merger conditions are pretty theatrical in nature. Usually, said conditions are often proposed by the companies themselves and were things they already had planned anyway, making “accomplishing them” rather trivial, zero calorie affairs. Companies sign off on these conditions because it helps them pretend the merger actually benefits the public, and regulators sign off because it provides cheap political brownie points and the illusion that companies are being held accountable. Neither is usually true, especially in telecom.

Even when the conditions are meaningful, it’s pretty routine to see telecom giants like Charter or Comcast ignore them completely, usually with zero real repercussions. For its part, Charter issued a statement claiming that this was all just an election year stunt by New York Governor Andrew Cuomo:

“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.”

And while Cuomo’s quest to protect his Governorship from challenger Cynthia Nixon likely isn’t entirely absent from the move (beating up on hated cable companies often provides easy political brownie points), the state was forced toward tougher options after Charter ignored $3 million worth of fines for missing merger commitments and misleading regulators.

This is also one of several long-standing state efforts to hold Charter accountable to the public. New York is one of 23 states filing suit against the FCC for its net neutrality repeal, and the state is also in the middle of an ongoing lawsuit against Charter for not only providing terrible service and slow speeds, but also for attempting to mislead regulators on other fronts (including gaming an FCC system that uses custom-firmware-embedded routers to test real-world speeds).

The move also has to be viewed in context of the newfound federal apathy toward consumer welfare as illustrated by the elimination of broadband privacy rules and net neutrality consumer protections. States are increasingly trying to fill the void left by a Trump administration that has made it abundantly clear (at least at the FCC) that openly pandering to despised telecom monopolies and then trolling users about it is now considered brainy tech and telecom policy.

It’s very likely that New York State is simply trying to force Charter to stop bullshitting and simply adhere to existing conditions, and most consumer advocates I’ve spoken to think this simply ends with a Charter settling and remaining in the state. Should Charter be forced to offload its New York State assets to another company, that company would likely be somebody like Comcast, which, based on consumer satisfaction studies, wouldn’t likely be much of an improvement.

Filed Under: broadband, kicked out, mergers, new york, ny psc, poor service, public service commission
Companies: charter