PSC rescinds Charter merger approval

PSC rescinds Charter merger approval

In a meeting on Friday, the New York State Public Service Commission voted unanimously to revoke its approval of the 2016 merger agreement between Charter and Time Warner Cable because, since the merger, the company has apparently made it clear that it has no intention of following through with its side of the bargain.

"These recurring failures led the Commission to the broader conclusion that the company was not interested in being a good corporate citizen and that the Commission could no longer in good faith and conscience allow it to operate in NY", the commission said in a press release.

Experts have reported that Charter Communications is going to be putting an appeal to the order made by the state of NY, though it likely will not be flipped over; it looks like Charter Communications is going out and never coming back in.

The cable provider and the state are at odds over the rate at which the company has rolled out high-speed internet in less-densely populated areas of the state, which was a key provision in the state commission's approval of the $55 billion Time Warner Cable merger in 2016.

Charter is ordered to file within 60 days a plan with the PSC to ensure an orderly transition to a successor provider (s).

The commission said the U.S. broadband provider failed to live up to its agreement as part of the merger to build internet access to an additional 145,000 households and businesses in rural areas of NY under-served by internet providers.

Shares of Charter (chtr) initially fell more than 2% on the news, but quickly recovered. "But the fact is that Spectrum has extended the reach of our advanced broadband network to more than 86,000 NY homes and businesses since our merger agreement".

After its reply and further PSC deliberations, the commission determined that Charter Communications acting as Spectrum could not comply with the contingencies imposed in the 2016 conditional approval of the Charter-Time Warner merger, and the approval was rescinded and Charter banned from doing business in the state.

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The commission ordered Charter to pay the state $1 million for missing the June milestone; that brings the total assessed by the PSC to $3 million.

According to the PSC, not only has Charter failed to meet the conditions of the approval, the company also has claimed it is not bound by the terms of the approval.

As a result, the commission's general counsel referred a false-advertising claim to the Attorney General's Office.

It remains to be seen if other states will follow New York's example in attempting to hold broadband providers accountable for their service to residents across the United States. Charter also must ensure that cable and internet customers' service is not interrupted during the transition.

Spectrum provides Cable TV, Internet and Voice Over Internet telephone service to much of Orange County and portions of Ulster and Dutchess counties.

It's unclear which company would step in to provide service for New Yorkers if Charter is forced to cease operations in the state.

Find the entire decision, go to www.dps.ny.gov, choose "Commission Documents" and enter Case Number 15-M-0388 in the box labeled "Search for Case/Matter Number".

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