NY Governor Threatens Charter Over Missed Merger Conditions

New York Governor Andrew Cuomo is threatening to revoke Charter's franchise agreements in New York State if the company doesn't quickly make up for previously ignored merger conditions affixed to the company's $89 billion acquisition of Time Warner Cable and Bright House Networks. The New York State Public Service Commission had already announced (pdf) that the Commission is seeking a possible revocation of Charter Communication’s NYC franchise agreement and a $1 million fine for failing to meet its network buildout obligations agreed to as part of its 2016 merger.

The PSC effectively accused Charter of lying to regulators in the company's most recent milestone report, when it asserted it had expanded service to 12,467 addresses in New York City.

But an earlier order also accused Charter of falling behind in its promise to expand broadband to New York State in general. The company had already been fined $13 million for lagging well behind its promise to deliver 100 mbps statewide by the end of 2018 and 300 mbps by the end of 2019. The company also pledged to expand broadband to 145,000 unserved or under-served homes and businesses within four years of the closing of the transaction.

"The Governor believes it is essential that corporations doing business with the State uphold their commitments, and we will not tolerate abusive corporate practices or a failure to deliver service to the people," the state said in an announcement.

"Large and powerful companies will be held to the same standard as all other businesses in New York," New York officials added. "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."

Like most telecom sector megamergers, Charter promised the world and all manner of synergies if it was allowed to acquire Time Warner Cable and Bright House Networks. Instead, many customers say they instead saw higher rates, fewer broadband upgrades, and worse customer service than Charter was already known for.

Of course if history is any indication, a few wrist slaps is likely all that's in store for Charter on both the state and federal level.