New York moves to break up Charter’s merger with Time Warner Cable
State regulators have accused the company of acting in "bad faith."
Telecom regulators have ordered Charter Communications to unwind its 2016 merger with Time Warner Cable in New York, revoking the combined company's permission to operate in the state in a decision published Friday.
The order from the New York Public Service Commission accuses Charter of "persistent actions demonstrating bad faith," claiming that the company has repeatedly failed to live up to promises it made during the merger approval process to connect more New Yorkers to high-speed internet.
The decision cuts against a broader nationwide trend of consolidation in the telecom and media industries, although it is limited to New York state and does not cover the more than 40 other states in which Charter does business, including Pennsylvania and New Jersey. The combined Charter-Time Warner Cable operation is the second-largest cable company in the country.
Under the order, Charter has 60 days to come up with a "transition" plan complying with the commission's decision. But the order contains few specifics, and the company could still seek to challenge it in court.
Charter had agreed to bring its broadband network to 145,000 unserved or underserved homes in New York as a condition of its acquisition of Time Warner Cable. But, the commission said, Charter soon missed its first deadline to expand its network to an additional 36,250 homes by May 2017.
Charter agreed to a series of revised targets with regulators. But when it provided its next update in December, commission officials said Charter did not deserve credit for more than 18,000 households it said it had connected, in part because many of them appeared to be located in New York City and not a hard-to-reach, less densely populated area.
Charter objected, saying that the commission was seeking to add new requirements the company had never agreed to and that the effort to disqualify the homes was groundless.
In a statement Friday, Charter — which offers service in New York state as Spectrum — implied that the commission's order may have been politically motivated. New York Gov. Andrew Cuomo has not shied away from criticizing Charter for its delays; in May, he foreshadowed regulators' decision by saying the public service commission had initiated "legal action" against the company. Cuomo faces off against challenger Cynthia Nixon in the Sept. 13 Democratic gubernatorial primary.
"In the weeks leading up to an election, rhetoric often becomes politically charged," Charter said in its statement. "But the fact is that Spectrum has extended the reach of our advanced broadband network to more than 86,000 New York homes and businesses since our merger agreement with the PSC. Our 11,000 diverse and locally based workers, who serve millions of customers in the state every day, remain focused on delivering faster and better broadband to more New Yorkers, as we promised."