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A Spectrum truck is parked at Charter Communications' office on Fair Lakes Road in DeWitt. Charter has agreed to a $13 million settlement with New York regulators over its failure to meet network build-out requirements tied to its acquisition of Time Warner Cable.

(Rick Moriarty | rmoriarty@syracuse.com)

Syracuse, N.Y. -- Charter Communications has tentatively agreed to a $13 million settlement with state regulators over its failure to meet cable network build-out requirements tied to its acquisition of Time Warner Cable.

The Public Service Commission approved of Charter's acquisition of Time Warner Cable last year with the condition that the company upgrade its broadband speeds to 100 Mbps statewide by the end of 2018 and to 300 Mbps by the end of 2019. In addition, the company agreed to expand its cable network to pass an additional 145,000 un-served or under-served homes and businesses within four years of the acquisition.

Charter, which operates under the brand name Spectrum, has reported that it completed the first speed upgrade ahead of schedule. However, as of May 18, it had only extended its network to pass 15,164 of the 36,250 premises it was required to pass in the first year following the merger, the commission said.

"The commission conditioned its approval of the merger on Charter's agreement to undertake several types of investments and other activities," Department of Public Service interim CEO Gregg Sayre said in a statement Tuesday. "While Charter is delivering on many of them, it failed to expand the reach of its network to un-served and under-served communities and commercial customers in the time allotted."

In lieu of a penalty for missing its build-out target, Charter has 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, the commission said.

Under the agreement, the company has committed to completing its build-out requirement of passing 145,000 additional premises in 21,646 increments over six periods through May 18, 2020. It will forfeit its right to earn back up to $1 million each time it misses a six-month build-out target.

The actual amount forfeited will vary, depending on the percentage of the target missed and whether Charter can demonstrate it has performed specific tasks in a timely manner, the commission said.

In a statement Tuesday, Charter said it has met or exceeded the vast majority of its key first-year commitments in New York associated with the merger. It said delays in pole-attachment approvals and "make-ready by pole owners" made it impossible to extend its network to the targeted number of homes in the first year after the merger.

"Thousands of Upstate consumers now have access to Spectrum services where approvals and make-ready have occurred, and we have a solid deployment plan to reach the thousands of additional homes in our commitment," the company said.

The settlement will require final commission approval after a public comment period.

The settlement is not related to a lawsuit filed against Charter in February by state Attorney General Eric Schneiderman. In the lawsuit, Schneiderman alleges that the company is delivering internet speeds that are far slower than promised for its highest-speed plans.

Charter is the largest cable provider in the state, offering cable television, broadband internet and telephone service to more than 2 million subscribers in more than 1,150 communities.

The settlement agreement can be obtained by going to the documents section of the department's website at www.dps.ny.gov and entering case number 15-M-0388 in the input box labeled "Search for Case/Matter Number."

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