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New York Orders Charter Out of State (arstechnica.com)

Posted by BeauHD on from the well-that-escalated-quickly dept.

Yesterday, it was reported that Charter Communications could lose its license in New York because of its failure to meet merger-related broadband deployment commitments. Today, according to Ars Technica, the New York State Public Service Commission (PSC) voted to revoke its approval of Charter Communications' 2016 purchase of Time Warner Cable (TWC). "The PSC said it is ordering Charter to sell the former TWC system that it purchased in New York, and it's 'bring[ing] an enforcement action in State Supreme Court to seek additional penalties for Charter's past failures and ongoing non-compliance," reports Ars. From the report: Charter has repeatedly failed to meet deadlines for broadband expansions that were required in exchange for merger approval, state officials said. The PSC has steadily increased the pressure on Charter with fines and threats, but Charter never agreed to changes demanded by state officials. As a result of today's vote, "Charter is ordered to file within 60 days a plan with the Commission to ensure an orderly transition to a successor provider(s)," the PSC's announcement said. "During the transition process, Charter must continue to comply with all local franchises it holds in New York State and all obligations under the Public Service Law and the Commission regulations. Charter must ensure no interruption in service is experienced by customers, and, in the event that Charter does not do so, the Commission will take further steps, including seeking injunctive relief in Supreme Court in order to protect New York consumers." The five types of misconduct that the commission cited to support its decision include: the company's repeated failures to meet deadlines; Charter's attempts to skirt obligations to serve rural communities; unsafe practices in the field; its failure to fully commit to its obligations under the 2016 merger agreement; and the company's purposeful obfuscation of its performance and compliance obligations to the Commission and its customers.

21 of 94 comments (clear)

  1. Nelson says by Anonymous Coward · · Score: 3, Funny

    HA! HA!

    1. Re:Nelson says by Areyoukiddingme · · Score: 5, Insightful

      FCC and the interstate commerce clause tells NY state to go fuck itself.

      Neither has any bearing. Charter bought a legal entity that exists in New York State. They must comply with state law in the operations of that entity. They didn't. They lose.

  2. Win for Municipal broadband in the Empire State? by Anonymous Coward · · Score: 2, Interesting

    Anybody care to comment on the odds of municipalities being able to pick up some of these assets to run on their own?

  3. The NYS PSC by rlitman · · Score: 5, Interesting

    wields a very heavy hammer. Frankly, I'm amazed that Charter would so flagrantly disregard them, as every other utility here takes PSC complaints VERY seriously. I guess this will keep the rest even more in line.

  4. Cable by Translation+Error · · Score: 2

    Wow, a cable company failing to live up to its promises and obligations and actually being smacked hard for it? I am shocked and amazed. Which is sad.

    --
    When someone says, "Any fool can see ..." they're usually exactly right.
  5. Re:Win for Municipal broadband in the Empire State by zlives · · Score: 2

    that would be awesome but highly unlikely

  6. Re:Shoud the win by zlives · · Score: 2

    can charter take this particular case to SCOTUS?

  7. Nice! by Gravis+Zero · · Score: 3, Insightful

    It's good to see these soulless corporations held to account for their bullshit. I hope NY now tries to make it easier for smaller telecomm companies to provide services to would-be consumers.

    --
    Anons need not reply. Questions end with a question mark.
    1. Re: Nice! by jeff4747 · · Score: 4, Insightful

      Gotta love the folks who just skip over the "failure to meet deadlines", "failure to serve rural areas as agreed", and "failure to meet obligations they agreed to in TWC merger" parts.

      How DARE these evil regulators require a business do what it said it would do. This must be all about unions.

    2. Re: Nice! by luther349 · · Score: 2

      yes but he was saying the failure was due to a union fight not just because they didn't fell like doing it as per normal.

    3. Re: Nice! by tlhIngan · · Score: 4, Insightful

      They failed to meet their deadlines and other commitments before the union fight started.

      Chances are, Charter was probably going to slip under the radar, then they started the union fight. The union reacted by filing a complaint with the PSC which led to an investigation and all the charges.

      Charter was probably hoping to skirt by doing crap and having no one noticed, then they started fighting with the union and someone there realized Charter isn't quite on the up and up.

      Usually it's just a pressure tactic, but I guess this time it backfired on Charter

  8. Re:Shoud the win by KixWooder · · Score: 4, Informative

    SCOTUS tends to stay out of state matters such as this (single state, no opposing rulings in various circuit courts). State supreme court is probably as high as they can go. They could appeal to SCOTUS, but it's doubtful they would take the case.

    --
    I hate fat people.
  9. Now if only Seattle would do that by snapsnap · · Score: 2

    Most of the city has a government-granted monopoly given to Comcast and as far as I know, they haven't expanded service in years. I have a few friends that live in the Wave area, and I'm jealous of the prices they pay and the bandwidth they have.

  10. Meet the new boss same as the old boss. by goombah99 · · Score: 5, Insightful

    My first thought is what does ordering out of state mean? The fiber they own, the Right-a-ways they own, any contractual monoplies they own and existing service contracts they own are property with value. Will they be able to sell these assets? If not it's a seizure of private property. Perhaps they will be allowed to continue service providing just not solicit new bussiness? Perhaps they will be allowed to lease these to another service provider?
    What I might guess is that they spin off a company called "not-Charter" and then sell or lease these assets to this wholly separate company. A holding company is created to hold both Charter and "not-charter" so one company now owns both companies (like Alphabet).
    Municipalities might try to fit to edge into this but how? not-charter has a competitive advantage of the customer base and existing lines. Municipalities might try to lease the lines but then they are just leasing charter stuff. They could start building out their own but things like right-aways on poles and properties will be a difficult thicket. Witness how Google fiber got screwed out of space on poles and conduits because they were not a registered telecom or lacked monopoly grants.
    Ironically the thicket of regulations that might seem like limits of cable companies are lobbied for by these companies to create entry barriers. THey like paying for rights of way because it denies others. There are often state wide laws that prohibit a municipality from competing with private enterprise. Municipalities are not allowed to favor one company over another by gifting them anything (anti-donation clauses to avoid graft).

    Thus charter exits, and non-charter enters. The customer's ID number on their bills doesn't even change. The profits all go to the holding company and the same share holders as before.

    Cuomo moves on to the senate, and then charter donates to the campaign for his replacement. three years from Now charter buys out "non-charter".

    --
    Some drink at the fountain of knowledge. Others just gargle.
    1. Re:Meet the new boss same as the old boss. by Anonymous Coward · · Score: 3, Informative

      I think it's likely that Charter really would sell the assets to a distinctly different cable company rather than a subsidiary created for the purpose of evading NY's order. It's entirely possible that those assets would be purchased by a company like Comcast or Cox, neither of which is much of an improvement over Charter. It's also possible that a company like Verizon might want into the cable business, something that's been discussed previously. I doubt that Verizon would be a significant improvement, either.

      I'm in Lincoln, Nebraska, another formerly TWC market that's now controlled by Charter. It's clear that Charter is trying to cut costs dramatically due to the debt from purchasing TWC. We used to get OTA channels from Omaha, which is 50 miles away, but those have steadily been removed. There used to be a call center in Lincoln and they actually provided pretty good customer service. That's since been closed. It also used to be possible for existing customers to negotiate with TWC and get additional promotions to keep bills relatively low. The cable company still makes a profit even at those reduced rates except that Charter has to pay off a large amount of debt from purchasing TWC.

      That's why selling off some assets might actually help Charter to some degree. Yes, it reduces their subscriber base, but it also provides an infusion of cash to pay off their debt from the purchase of TWC. The problem is that those markets will probably be acquired by Comcast, Cox, or a nearly equally evil outsider like Verizon.

    2. Re:Meet the new boss same as the old boss. by Anonymous Coward · · Score: 5, Insightful

      It means the State of New York revokes Charter's ability to carry on public utility business within the State. More importantly, it must divest itself of those business units that are under the PSC's regulatory discretion and do so in a manner that does not interrupt service to the customers. Failing to do so will incur additional penalties, for which the PSC is ready to take those proceedings all the way to the Supreme Court if needed.

      In other words, a corporation is going to find out very quickly that you just don't fuck with the regulatory bodies of a sovereign power.

    3. Re:Meet the new boss same as the old boss. by jeff4747 · · Score: 2, Informative

      They're required to sell the infrastructure to someone else. If they fail to do so in a timely manner, then eminent domain-style action will probably take place.

    4. Re:Meet the new boss same as the old boss. by Areyoukiddingme · · Score: 4, Interesting

      My first thought is what does ordering out of state mean? The fiber they own, the Right-a-ways they own, any contractual monoplies they own and existing service contracts they own are property with value. Will they be able to sell these assets? If not it's a seizure of private property.

      Which is entirely legal in New York State. After Kelo v. City of New London several states amended their constitutions to prevent economic takings. Others passed laws forbidding it. New York did neither. If Charter refuses to do as ordered, NYS can and will use eminent domain to force them to, and they will succeed, very quickly by modern judicial standards, because of Kelo. It won't even make it out of federal circuit court.

  11. Holy farukin crap by Snotnose · · Score: 2

    Someone actually went to bat for us plebes. Way to go!

    Then again, my 60 y/o cynical self thinks it's more like they didn't grease enough palms.

  12. Re:Win for Municipal broadband in the Empire State by The+Good+Reverend · · Score: 5, Insightful

    The state spelled out exactly what Charter had to do in order to be allowed to purchase Time Warner. Charter agreed to the conditions. Now, Charter is being punished for not adhering to the specific details of the agreement (and for lying and saying that they had). The state tells them to GTFO and sell back the property, per their agreement

    This is exactly how this should work, and good on New York for following through.

  13. Re:fuck new york by slashdot_commentator · · Score: 3, Insightful

    The US would go broke, and your local military base in Buttfuck, Nowhere would shutdown. Go fuck yourselves, traitor Putin bitches.

    --
    There is no America. There is no democracy. There is only IBM and AT&T and DuPont, Dow, General Electric, and Exxon