Charter’s NYC franchise overtly threatened by state officials

Charter's updated logo
Charter claims to have met the threshold through expansions in New York City. (Charter Communications)

The New York Public Services Commission (PSC) has fined Charter Communications $1 million and threatened its franchise agreement in New York City. 

This marks a significant escalation in New York state officials’ complaints over how the cable operator has responded to broadband expansion conditions tied to its 2016 purchase of Time Warner Cable.

“It is critically important that regulated companies strictly adhere to the state’s rules and regulations,” Commission Chair John B. Rhodes said in a statement (PDF). “If a regulated entity like Charter’s cable business decides to violate or ignore the rules, we will take swift action and hold them accountable to the full extent of the law.”

Under the PSC’s 2016 order approving Charter’s purchase of TWC, Charter is required to extend its network to pass an additional 145,000 homes and business by 2020. The commission said that Charter has failed to meet incremental milestones. 

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The PSC statement said that a "detailed audit by commission staff found more than 14,000 passings claimed by Charter for its December milestone were ineligible, causing Charter to fall short of the milestone by more than 8,000 passings."

Charter claims to have met the threshold through expansions in New York City. But the PSC said those don’t count, because they were already mandated by the operator’s franchise agreement with the city. 

The commission said that Charter is either in violation of the expansion order or its franchise agreement. The PSC has issued a show cause order (PDF, obtained by Ars Technica), to answer the "commission staff's findings that the company should pay $1 million to the State Treasury for missing a December deadline to expand its network to 36,771 additional homes and businesses that did not have high speed broadband as of the date of Charter's acquisition of Time Warner cable."

The PSC’s order also questions why Charter’s NYC franchise payments have declined since it purchased TWC. 

In its statement, the commission added, “If the company materially breaches its franchise agreements, the commission can terminate the agreements.”

Oh, and it gets even worse for Charter. The commission said that back in December, it commenced a “management and operations audit” of Charter’s telephone service quality. The audit, the PSC, was triggered by several service interruptions. 

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Charter responded with the following statement: “Charter is committed to bringing more broadband to more people across New York State," the company said in a statement to Ars. "We exceeded our last buildout commitment by thousands of homes and businesses. We've also raised our speeds to deliver faster broadband statewide. We are in full compliance with our merger order and the New York City franchise, and we will fight these baseless and legally suspect actions vigorously."

Last year, Charter agreed to pay a $13 million fine after the PSC determined it wasn’t moving fast enough on its post-TWC network expansion promises.