New York state officials move on Charter’s NYC franchise agreement

Gavel court room lawsuit judge
The New York Public Services Commission has made good on a threat to come after Charter's franchise agreement in the Big Apple. (Pixabay)

The New York State Public Service Commission (PSC) has started legal action against Charter Communications for potential violations of its franchise agreement in the New York City area, Governor Andrew Cuomo announced yesterday

In a steadily escalating dispute, New York state officials have accused Charter of not living up to promises made during regulatory review of its 2016 purchase of Time Warner Cable. Operating under the Spectrum brand, Charter hasn’t delivered on promised broadband build-outs and speed upgrades, officials say.

"The state approved Spectrum's acquisition and its ability to operate in New York based on the fulfillment of certain obligations, including providing broadband access to underserved parts of the state and preserving a qualified workforce,” Cuomo’s office said.

"The Governor believes it is essential that corporations doing business with the state uphold their commitments, and we will not tolerate abusive corporate practices or a failure to deliver service to the people,” the Governor’s statement added. ”Large and powerful companies will be held to the same standard as all other businesses in New York. The Spectrum franchise is not a matter of right, but is a license with legal obligations and if those are not fulfilled, that license should be revoked."

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In an email to FierceCable this morning, Charter responded with this statement: “Charter is bringing more broadband to more people across New York State. 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 actions vigorously.”

In March, the PSC fined Charter $1 million and threatened its franchise agreement in New York City.

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. 

“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.”