Albany

State penalizes Spectrum for $2M over high-speed internet rollout

Public Service Commission says slow expansion violates terms of Charter-Time Warner merger
The Charter Communications logo is seen at the company’s office in Stamford, Conn.,in 2015.
PHOTOGRAPHER:
The Charter Communications logo is seen at the company’s office in Stamford, Conn.,in 2015.

Categories: Business, News, Schenectady County

ALBANY — State regulators no longer want Charter Communications to pay a $1 million penalty for the firm’s slower-than-promised expansion of high-speed internet service.

Now, the Public Service Commission wants $2 million.

The PSC proposed the $1 million penalty in March, but Charter sought and received an extension to May on its deadline to respond. On Thursday, the PSC ordered Charter to pay $2 million and threatened more severe penalties — including revoking permission for Charter’s merger with Time Warner Cable — if Charter doesn’t accept and comply with the conditions the PSC imposed on the merger approval.

Charter operates seven business units in its Spectrum family; Spectrum Internet is at issue in this instance. Charter spokesman Andrew Russell issued a statement Thursday rejecting the state’s criticism:

“Spectrum has expanded its network infrastructure to bring broadband to tens of thousands of residences and businesses in New York State; we exceeded our last commitment, and we continue to meet our merger obligations.”

He would not say whether Charter is considering an appeal, only that Charter is looking at options for a next step.

Thursday’s decision was the latest chapter in a continuing dispute between the PSC and Spectrum that stems from Charter’s commitment to extend high-speed internet access to 145,000 new addresses across the state, as a condition of Charter being allowed to acquire Time Warner Cable in 2016. 

The PSC in June 2017 extracted a $1 million penalty from Charter, which by its own admission was reaching new addresses more slowly than called for in its timetable. At the same time, the PSC ordered Charter to post a $12 million letter of credit, from which the PSC would extract further penalties if Charter didn’t meet an expedited schedule of expansion targets at six-month intervals.

By early 2018, Charter said it was ahead of that schedule — but the PSC in March accused Charter of artificially inflating its totals to make that claim and sought the $1 million penalty. In response, Charter insisted it was on schedule and vowed to fight the penalty.

On Thursday, PSC reaffirmed the $1 million penalty for missing the December target and ordered another $1 million penalty because Charter hadn’t caught up by mid-March.

The PSC also escalated its rhetoric, saying in a Thursday news release that Charter is insisting it is not bound by the conditions the PSC set for the Time Warner Cable acquisition. It ordered that Charter unequivocally accept those terms or risk having the merger revoked.

The state, meanwhile, is closing in on Gov. Andrew Cuomo’s goal of ensuring virtually every New Yorker has access to high-speed internet service. Charter is not participating in the public-private effort to make that happen.

In a March 23 statement sent to the PSC and shared with the public, the governor said:

“Charter Communications has been delinquent on their agreement to provide broadband to New Yorkers. The state has undertaken a $1 billion program to provide 100 percent high speed broadband to the people of New York. Approval of the Charter Communications acquisition was conditioned on timely performance. Such a breach cannot be tolerated, as it places New Yorkers at a competitive disadvantage. Absolute diligence should be the PSC standard.”

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