Charter is trying to claim that states cannot hold the company accountable for sub-standard service or failed promises. That's the overall takeaway from Charter's response last week to New York State regulators, which have been trying to hold the cable giant accountable for repeatedly failing to meet merger promises affixed to its acquisition of Time Warner Cable and Bright House Networks.
The New York State Public Service Commission
had already announced (pdf) that the Commission is seeking a possible revocation of Charter Communication’s NYC franchise agreement and a $1 million fine for failing to meet its network buildout obligations agreed to as part of its 2016 merger.
The PSC effectively accused Charter of lying to regulators in the company's most recent milestone report, when it asserted it had expanded service to 12,467 addresses in New York City.
But an earlier order also accused Charter of falling behind in its promise to expand broadband to New York State in general. The company had already been fined $13 million for lagging well behind its promise to deliver 100 mbps statewide by the end of 2018 and 300 mbps by the end of 2019. The company also pledged to expand broadband to 145,000 unserved or under-served homes and businesses within four years of the closing of the transaction.
Now that the state is actually trying to hold it accountable for these missed deadlines and broken promises, it's claiming that New York doesn't actually have the authority to do so.
"The Commission does not have the authority to compel broadband providers to offer service to particular customers at particular speeds or at particular locations, or to establish any other obligations in a cable television and telecommunications service merger related to the provision of broadband services," Charter claims.
"Indeed, it has been established for years that Internet access services are interstate, and accordingly subject to exclusive federal jurisdiction," the company adds. "The FCC has made abundantly clear that states may not impose “any so-called ‘economic’ or ‘public utility-type’ regulation” on broadband services and that federal law flatly preempts such requirements."
Charter's engaged in some wishful thinking here. The State PSC certainly has authority over Charter given it not only holds a franchise agreement in the state, but agreed to merger conditions with the state.
And while the Trump FCC has been trying to claim that the FCC has the authority to prevent states from protecting consumers (as they're trying to do on net neutrality), that particular legal theory rests on untested and shaky legal ground. Charter, meanwhile, is also facing an
ongoing lawsuit by New York State for slow speeds and additional, unrelated efforts to mislead regulators (like
gaming the speedtest systems the FCC uses to determine delivered broadband speeds).