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State Board Revokes Spectrum-Time Warner Cable Merger, Citing 'Egregious Conduct'
By
Jake Offenhartz
Published Jul 27, 2018
Modified Jul 27, 2018
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By
Jake Offenhartz
Published Jul 27, 2018
Modified Jul 27, 2018
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(Courtesy of Charter/Spectrum)
Following through on recent threats, a state regulator has announced that they're revoking approval of the 2016 merger agreement between Charter Communications (aka Spectrum) and Time Warner Cable, due to a failure to meet merger-related obligations and a pattern of "purposeful obfuscation" on the part of the telecommunications giant.
The reversal, handed down Friday by the New York State Public Service Commission, means that Spectrum could soon be forced to spin off its Time Warner Cable division in New York, potentially affecting more than 2.5 million subscribers across the state. For now, the commission has ordered the company to maintain service to its customers while an orderly transition occurs.
The basis for the revocation, the regulator said, is Spectrum's repeated failure to provide the public benefits it promised in exchange for state approval of its purchase of Time Warner Cable two years ago. According to the commission, Spectrum has blown past every network expansion target since the merger, while falsely claiming to customers that it is exceeding these commitments. The company has also allegedly employed unsafe practices in the field, and attempted to renege on promises to bring service to rural communities.
"Such egregious conduct cannot be condoned and the only reasonable remedy that remains is for the Commission to revoke the 2016 merger approval and order Charter to plan for an orderly transition to a successor provider(s) to serve its New York State customers," the commission noted in a statement.
"Charter’s non-compliance 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," added Commission Chair John B. Rhodes.
In addition to revoking the merger, the commission has directed Spectrum to pay $1 million to the State Treasury for missing a June deadline. Last year, the Attorney General's office sued Spectrum for its false promises of "blazing fast" internet, alleging that "bottlenecks in its network would result in many subscribers routinely experiencing the very hallmarks of a poor Internet connection." The suit also claimed that Spectrum-Time Warner subscribers were "getting dramatically short-changed on both speed and reliability."
According to the city's Truth In Broadband report issued earlier this year, nearly a third of New Yorkers do not have a home subscription to broadband internet, and a third of black and Hispanic households lack subscriptions. As we reported earlier today, business owners in the city seeking a high-speed provider face installation estimates from Spectrum for well over $100,000.
In the year following the merger, Spectrum increased its profits by more than 180 percent, and reported a gross profit last year of $10 billion.
Reached for comment, a spokesperson for Spectrum told Gothamist, “In the weeks leading up to an election, rhetoric often becomes politically charged. 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.”
Tagged
broadband
charter communications
internet
merger
spectrum
time warner cable
Jake Offenhartz
Jake Offenhartz is a former Gothamist reporter.
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Gothamist is funded by sponsors and member donations
Gothamist is funded by sponsors and member donations
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