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N.Y. state withdraws approval of Charter and Time Warner merger, boots Spectrum

The New York Public Service Commission (PSC) has withdrawn its approval of the Charter Communications and Time Warner Cable merger. According to a PSC release, the revocation is for specific cause, namely that Spectrum, the name of the merged entity, failed to deliver specific benefits to New Yorkers that were among the conditions upon which the merger was approved, the PSC says.

In addition to rescinding its approval of the Charter and Time Warner merger, the commission also filed an enforcement action in the New York State Supreme Court to seek $3 million in penalties for past failures and continuing noncompliance.

The PSC listed five areas of Charter’s alleged misconduct:

  • Repeated missed deadlines;
  • Attempts to avoid obligations to rural communities;
  • Unsafe practices;
  • Failure to fully commit to the merger obligations; and
  • Purposeful obfuscation of its performance and compliance obligations.

Concluding that Charter “was not interested in being a good corporate citizen” and that the Commission could no longer allow it to operate in New York, the PSC stated its actions address the failings and are meant “to ensure New York has a partner interested in the public good, not just lining its pockets.”

Commission Chair John B. Rhodes said, “Charter’s noncompliance 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.”

Conditions of the 2016 merger included extending service availability to 145,000 underserved homes and businesses in less populated areas of the state within four years and upgrading network speeds to 100Mbps by the end of 2018 and 300 Mbps by late 2019.

According to the PSC, not only has Charter failed to meet the conditions of the approval, the company also has claimed it is not bound by the terms of the approval. The Commission also said that charter tried to pass the blame for the failures to other companies, including utility pole owners.

In addition to not meeting deadlines, the PSC also said Charter falsely claimed it was meeting and exceeding its commitments in advertisements, leading the Commission to file a false advertising claim with the state attorney general’s office.

Charter now has 60 days to file a transition plan for an orderly transition to one or more successors. During the 60 days, Charter is obligated to continue service uninterrupted.

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