New York's battle with Spectrum: What you should know

ALBANY - New York's utility regulators remain in a pitched battle with Charter Spectrum as Gov. Andrew Cuomo's office warned Wednesday that the company's ability to operate in New York City could be in jeopardy.

The regulatory clash over internet speeds and franchise payments stems from Charter Communications' 2016 merger with Time Warner Cable, which had been the cable television and internet provider for much of the state.

Spectrum is New York's largest cable provider, with more than 2.6 million subscribers and about 1,150 franchise agreements throughout the state.

So what's this fight all about? And what will it mean for you?

Here's what you should know:

What happened?

In March, state Public Service Commission chairman John Rhodes issued two orders against Charter Spectrum, requiring the company to defend itself.

The first order accused Spectrum of falling behind on its merger agreement in New York, which had required the company to provide access to broadband Internet by December to 36,771 additional homes and businesses that didn't have access at the time of the Time Warner Cable merger. The second order launched an investigation into whether Spectrum is complying with its New York City franchise agreements, questioning why payments to the city have dropped since Charter took over.

The full Public Service Commission approved the investigation at its April 19 meeting. The company has until May 9 to respond.

$1 million fine

The PSC is trying to force Spectrum to pay $1 million for falling behind its broadband expansion agreement, particularly in more rural areas of the state.

The merger agreement requires Spectrum to expand broadband to 145,000 homes within four years with incremental deadlines along the way.

Each missed deadline could carry a fine of up to $1 million.

“If a regulated entity like Charter’s cable business decides to violate or ignore the rules, we will take swift action and hold them accountable to the full extent of the law," Rhodes said in March.

The disagreement with the state centers on 14,000 addresses across New York that the state claims aren't eligible to be counted.

If they aren't counted, Spectrum would be behind schedule.

Spectrum, however, denies it's behind schedule and claims the addresses should be counted.

In fact, the company claimed in January to be ahead of schedule.

What about the NYC franchise agreements?

That could be a much bigger deal for Spectrum.

The company has franchise agreements in four of New York City's five boroughs, which let Spectrum offer their products in the country's largest market with the biggest potential customer base.

The PSC is investigating whether the company is complying with that franchise agreement, which requires the company to pay 5 percent of revenue from video services to the city.

In short, the state regulators are looking at why the payments have dipped since the merger and whether Spectrum has expanded broadband access quickly enough in the city.

What will it mean for customers?

A $1 million fine likely wouldn't have much of an immediate impact on customers. And it's no guarantee that the fine will go into effect since Spectrum still has until May 9 to explain its side of the story.

But revoking the New York City franchise agreement would be a drastic step that would leave Spectrum customers looking for another provider.

Like the fine, however, that's a ways off. The PSC's investigation just began and Spectrum still has time to explain its defense.

As of now, the franchise battle is limited to New York City. Other cities and towns across the state have their own franchises with Spectrum.

What's Spectrum say?

The company says it's fully complying with both the merger and its New York City franchise agreements.

"Charter is bringing more broadband to more people across New York State," Charter Spectrum spokeswoman Lara Pritchard said in a statement Wednesday.

"We exceeded our last buildout commitment by thousands of homes and businesses. We’ve also raised our speeds to deliver faster broadband statewide."

She continued: "We are in full compliance with our merger order and the New York City franchise, and we will fight these baseless actions vigorously."

What's Gov. Andrew Cuomo say?

The Democratic governor is sounding a tough tone.

His office issued a statement Wednesday touting the Public Service Commission's actions and raising the possibility of revoking Spectrum's New York City franchise.

"Large and powerful companies will be held to the same standard as all other businesses in New York," Cuomo press secretary Dani Lever said in the statement.

"The Spectrum franchise is not a matter of right, but is a license with legal obligations and if those are not fulfilled, that license should be revoked."

Cuomo has clashed with Spectrum before.

He spoke at a rally in September of striking Spectrum workers who were seeking more-favorable contract terms.

The battle between Spectrum and the IBEW Local #3 union continues.