Charter CEO Tom Rutledge yesterday vowed to fight the New York state government’s decision to kick Charter out of the state.
The State Public Service Commission (PSC) voted Friday to revoke its approval of Charter’s 2016 purchase of Time Warner Cable (TWC), and ordered Charter to sell the former TWC system.
The dispute is over Charter’s alleged noncompliance with broadband construction requirements. New York’s 2016 merger approval required Charter to extend its network to 145,000 unserved and underserved residential housing units and businesses within four years, and to meet several interim deadlines along the way.
The PSC says that Charter has missed all its deadlines and that it tried to count ineligible addresses toward the requirements. For example, Charter’s “new” broadband deployments in New York City included addresses that the company was already required to serve as part of preexisting franchise agreements, the commission said in March.
Rutledge insisted that the PSC is wrong. “We believe we’re in compliance with the plain reading of the buildout requirements that the state imposed on us in merger conditions, and we have a very strong legal case and ability to defend ourselves,” he said. “It could play out over a lengthy period of time if required.”
With last week’s vote, the PSC ordered Charter to file a plan for selling the former TWC system in New York within 60 days. The PSC also said it would seek “injunctive relief” in court if Charter fails to comply.
The PSC also said it would “bring an enforcement action in State Supreme Court to seek additional penalties for Charter’s past failures and ongoing noncompliance.”
Multiple fines for missed deadlines
Rutledge claimed that New York’s decision has been “politicized” because Charter has “labor issues in New York City.”
“Just to put it in perspective, we’re operating in 41 states, we have thousands of franchise agreements,” Rutledge said. “Generally, we have good relationships with the communities we serve and we live up to our commitments, and we have in New York State. In fact, we’re well ahead of our obligations in terms of speed upgrades and in the buildout itself.”
Charter agreed to a fine and a revised buildout schedule last year after missing a deadline to pass 36,250 homes and businesses within one year of the merger approval.
The PSC in June ordered Charter to pay another $2 million fine for missing a subsequent deadline, but Charter has continued to claim that it is in full compliance. The NY Department of Public Service says that Charter has been running “false advertisements and publications about its compliance with its obligations to New York State,” and asked the state attorney general and US Securities and Exchange Commission to investigate the alleged false claims.
“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,” PSC Chair John Rhodes said Friday.
