NY Gives Charter Another Extension as They Negotiate Over Broadband Commitments
New York government officials still haven’t followed through on a July 2018 decision to kick Charter Communications out of the state. Negotiations between Charter and the state have dragged on for months past the original deadline, and the sides say they’re getting closer to an agreement that would allow Charter to remain in New York.
The state Public Service Commission (PSC) voted on July 27, 2018 to revoke its approval of Charter’s 2016 purchase of Time Warner Cable (TWC), after accusing Charter of failing to meet merger-related broadband expansion commitments. The PSC ordered Charter to sell the former TWC system and to file a transition plan within 60 days.
But Charter still hasn’t had to file that transition plan, and may never have to, because the PSC has repeatedly granted deadline extensions while Charter negotiates with the state. Charter requested yet another extension on Tuesday this week, and the PSC granted it on Wednesday, setting a new deadline of May 3, 2019.
Charter’s filing that asked for an extension said it and the PSC have made "considerable progress" toward a settlement.
Charter and the PSC have "exchanged term sheets and reached agreement on many key issues," Charter wrote. Charter said the sides are doing "further data analysis" on "certain passings," apparently referring to locations where Charter has deployed or will deploy broadband service. Charter said the latest extension "will allow the parties an opportunity to fully review the information exchanged, as well as to convert the term sheet into a fuller written agreement."
State still seeks more broadband
The PSC’s order granting Charter’s request said the extension is contingent on Charter following public service law and refraining from airing "misleading advertisements." The PSC has previously accused Charter of running ads that falsely claimed it complied with the merger requirements.
Under the merger condition, Charter was required to extend its high-speed broadband network to 145,000 unserved and underserved homes and businesses within four years, but the state says Charter repeatedly failed to meet deadlines for those broadband expansions While Charter insisted it has met its obligations, New York officials said Charter tried to count locations that weren’t eligible for the deployment requirement. For example, Charter’s "new" broadband deployments in New York City included addresses that the company was already required to serve as part of its franchise agreements, the PSC has said.
The PSC’s approval of the latest deadline extension said the state will insist upon a few things in any settlement.
The PSC order said:
"Department Staff had previously advised that any final settlement will include:
- an agreement on eligible passings [i.e. home and business addresses] that will count toward the 145,000-passing buildout condition pursuant to the 2016 merger order;
- a penalty and/or an arrangement pursuant to which Charter funds the expansion of broadband access to further customers in addition to those passed pursuant to the buildout condition; and
- an enforceable schedule to complete the remaining buildout work,"
Trouble in New York City
Charter is also facing legal problems with New York City officials. Mayor Bill de Blasio this week accused Charter of not paying $6 million in required fees, the New York Daily News reported.
"The cable company is supposed to pay the city a portion of its revenue generated from ad time sales, but it’s been deliberately shorting the amount, according to a letter sent Wednesday to its CEO from Mayor de Blasio," the Daily News wrote. "The city claims Charter… has been applying its fees on net payments after expenses, not on the gross revenues as required. The city also says Charter has withheld revenue from another business it partially owns by claiming it’s not subject to the royalty fee agreement — a position the city disputes."
Charter disagreed, saying that it’s in full compliance with its franchise agreement with the city. But the city ordered Charter to pay the $6 million within 10 days or make a case for why it shouldn’t have to and threatened a lawsuit if Charter doesn’t comply.