New York state regulators are reneging on their approval of the Charter Communications acquisition of Time Warner Cable, alleging the cable provider broke its promise to deliver high-speed broadband to rural customers.
Charter, the second-largest cable provider in the US after Comcast,. The company has since rebranded itself as Spectrum.
On Friday, the New York State Public Service Commission voted to revoke its approval of the deal, claiming Charter has failed to meet obligations to build its network in rural regions. In order to get its deal approved, Charter had promised to make broadband available to an additional 145,000 homes and businesses in the state's rural communities within four years of when the deal closed. It also promised to upgrade broadband speeds to 100Mbps by the end of 2018, and 300 Mbps by the end of 2019 throughout its service area.
The commission said the company has failed to meet several deadlines in achieving these goals.
"Charter's repeated failures to serve New Yorkers and honor its commitments are well documented and are only getting worse," Commission Chair John Rhodes said in a statement. "Charter's non-compliance and brazenly disrespectful behavior toward New York State and its customers necessitate the actions taken today seeking court-ordered penalties for its failures, and revoking the Charter merger approval."
Charter responded in its own statement that "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 (commission)," it said. "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."
The cable company, which provides cable, internet and telephone services to more than 2 million New York subscribers in New York City and other major metropolitan areas like Buffalo, Rochester, Syracuse and Albany, is required to continue operations for 60 more days without interruptions in service, as the state transitions to a successor provider.
The state is also seeking $3 million in penalties from Charter, officials said.