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Charter: States Can't Hold Us Accountable for Failed Promises

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.

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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).

Most recommended from 49 comments



Economist
The economy, stupid
Premium Member
join:2015-07-10
united state

22 recommendations

Economist

Premium Member

$13M? Petty cash for Charter

They will keep promises only when it stops being profitable to break them.

TIGERON
join:2008-03-11
Boston, MA

2 edits

18 recommendations

TIGERON

Member

This is why we need municipal networks

Since ejecting these greedy executives into the vacuum of space is not an option YET.
boknows
join:2001-08-19
Groton, NY

1 edit

12 recommendations

boknows

Member

Apparently we can't hold politicians accountable either.

Apparently we can't hold politicians responsible for their idiotic decisions either. They and probably Charter greasing their palms is what allowed this merger to go through in the first place. There were lots of warnings from naysayers that got ignored.
Ostracus
join:2011-09-05
Henderson, KY

11 recommendations

Ostracus

Member

Carrot, no stick.

If they couldn't be held accountable, what was the point of writing it into the contract in the first place?
dylking
join:2001-07-31
Saint Paul, MN

9 recommendations

dylking

Member

Wonder if that works both ways?

If the state can't hold Charter to the agreements, can Charter hold the state to the license? Maybe the state can just go find someone else, and say 'hey, you can't hold us to our agreements, since we can't hold you to yours'...

maybe that only works with petty people, and not mega corps and governments.
en103
join:2011-05-02

7 recommendations

en103

Member

While Charter may attempt to pass the buck...

If it made promises to state regulators and cities through its franchise agreements, there is no valid reason that they cannot uphold them.
I'm sure they are attempting to pull a Verizon in PA style of bail on commitments. That being said, NY has had a lot of scandalous AG's in the recent past, (Spitzer, Cuomo, Schniederman) and who knows how much grandstanding these folks do.

ARGONAUT
Have a nice day.
Premium Member
join:2006-01-24
New Albany, IN

6 recommendations

ARGONAUT

Premium Member

The Boob Cable

More cord cutting!

KoRnGtL15
Premium Member
join:2007-01-04
Grants Pass, OR

4 recommendations

KoRnGtL15

Premium Member

Of course......

They got what they wanted with the merge. Now it is a big FU to everything else. Don't like it? TOUGH! That is Charter's attitude.