Charter Fined $13 Million for Failing to Meet Merger Conditions So not only has Charter's acquisition of Time Warner Cable and Bright House been relatively unpleasant and expensive for consumers, the company has taken heat for failing to meet broadband deployment conditions imposed on the deal by New York State. Earlier this year, Charter was fined $13 million by the New York State Department of Public Service for failing to meet broadband build out requirements imposed as part of its recent mega-merger.

In a statement this week by the New York Public Service Commission (pdf), the PSC finally formalized the penalty, stating it's the "largest cable company financial settlement of its kind in state history and possibly the largest in the nation’s." Given the apathy of most regulators and state governments complete disinterest in holding large, wealthy ISPs accountable for failed promises or fraud that's not particularly surprising. While many of these same regulators rushed to quickly approve the deal in exchange for campaign contributions, you'd be hard pressed to find many politicians caring much about how the deal has resulted in even worse service and higher prices than ever. In New York, Charter was required to do a number of things it would have likely done anyway, including: • Deploy broadband speed upgrades to 100 mbps statewide by the end of 2018 and 300 mbps by the end of 2019 • Build out Charter’s network to pass an additional 145,000 unserved or under-served homes and businesses within four years of the closing of the transaction. The NY PSC says that as of May 18, 2017, Charter had only extended its network to pass 15,164 of the 36,250 premises it was required to pass in the first year. As a penalty, NY state says Charter agreed to pay $1 million in grants for equipment to provide computer and internet access to low-income users, and to set aside $12 million as a security to meet its network expansion commitment going forward. “In its approval of the merger, the Commission required Charter to undertake several types of investments and other activities,” said Commission Chair John B. Rhodes. “While Charter is delivering on many of them, it failed to expand the reach of its network to un-served and under-served customers at the pace it committed. We are taking these additional steps to ensure full and complete compliance.” “In its approval of the merger, the Commission required Charter to undertake several types of investments and other activities,” said Commission Chair John B. Rhodes. “While Charter is delivering on many of them, it failed to expand the reach of its network to un-served and under-served customers at the pace it committed. We are taking these additional steps to ensure full and complete compliance.”







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Most recommended from 24 comments



Simba7

I Void Warranties

join:2003-03-24

Fromberg, MT 14 recommendations Simba7 Member $13M? Wow. That.. really taught them a lesson.



*hears Charter's CEO laughing in his office* videomatic3

join:2003-12-12

Pleasanton, CA 14 recommendations videomatic3 Member Chump change Fine them the cost to build the network they promised and do it yourself and see how many carriers finally do what they promise

Packeteers

Premium Member

join:2005-06-18

Forest Hills, NY ·Verizon FiOS

·Charter

Asus RT-AC3100

(Software) Asuswrt-Merlin

8 recommendations Packeteers Premium Member parking ticket when are states going to realize that fines are just the cost of doing business, so the states that fine instead of something more punitive - are just filling their tax coffers while passing additional fine costs on to consumers.



i worked for a company with 50 trucks, and we had a bin at reception for all the parking tickets we accumulated, bargained down and paid. had the city actually booted and towed away our trucks, then maybe our drivers would have given a shit about how carelessly they parked.



states have to be willing to tell franchises that work in their state - if you want to serve our profitable neighborhoods, you gotta take on the under-served communities as well - we will not give you right of way to one area without the other being served - period. kherr

Premium Member

join:2000-09-04

Collinsville, IL 5 recommendations kherr Premium Member Cheaper to pay fine than do the work ..... ..... that's how Verizon handled their NYC buildout requirements .... Mikeysama

join:2007-08-14

Lady Lake, FL 3 recommendations Mikeysama Member so.. Sooo is that many going to be used for deployment? No? Ok.

Economist

The economy, stupid

Premium Member

join:2015-07-10

united state 3 recommendations Economist Premium Member Petty cash Turn than M into a B and these companies might start following through on their promises.

Barron

Laissez les bons temps rouler!

Premium Member

join:2001-11-25

Litchfield Park, AZ 2 recommendations Barron Premium Member Arrogant Executives Why are the senior managers of virtually all communication companies such arrogant assholes?

GOD666

join:2017-03-10 2 edits 2 recommendations GOD666 Member $13 million dollar fine - OR - buy out of commitment option For all parties concerned, this "fine" basically amounts to a "buy out" option since now they have been fined they will no longer be held to account on their original promise. This "punishment" basically is a "get out of jail free" type of a deal which Charter likely had already placed a set aside amount for this day so they would not actually need to fulfill their commitment.



To you or me, $13,000,000.00 would hurt us. For them it is a savings investment since it is not even a fraction of the cost they would have had to pay in order to fulfill their commitment. For a multi-billion dollar company it's equal to you or I, cutting out coupon in the Sunday Paper so that they could save money by paying this, over their commitment price.



No lesson was learned other than its back to business as usual. If they were serious about having them "learn" anything, it would hurt, and not be business as usual.