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Charter Pays $13 Million for Failing to Meet Merger Conditions

So not only has Charter's acquisition of Time Warner Cable and Bright House been relatively unpleasant and expensive for consumers, the company appears to have failed to meet merger conditions imposed on the deal by New York State. Charter has been fined $13 million by the New York State Department of Public Service for failing to meet broadband build out requirements imposed as part of its recent mega-merger.

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In New York, Charter was required to do a number of things it would have likely done anyway, including:

• Deploy broadband speed upgrades to 100 mbps statewide by the end of 2018 and 300 mbps by the end of 2019

• Build out Charter’s network to pass an additional 145,000 unserved or under-served homes and businesses within four years of the closing of the transaction.

"The commission conditioned its approval of the merger on Charter’s agreement to undertake several types of investments and other activities," said Gregg Sayre, department interim CEO, in a statement (pdf). "While Charter is delivering on many of them, it failed to expand the reach of its network to un-served and under-served communities and commercial customers in the time allotted."

More specifically, the NY PSC says that as of May 18, 2017, Charter had only extended its network to pass 15,164 of the 36,250 premises it was required to pass in the first year. As a penalty, NY state says Charter agreed to pay $1 million in grants for equipment to provide computer and internet access to low-income users, and to set aside $12 million as a security to meet its network expansion commitment going forward.

Like most telecom sector mergers, what Charter promised before the deal -- and what's been delivered since -- are notably different. Many of our regulars complain that customer service got significantly worse after the deal -- an impressive feat given that Charter already had some of the worst customer satisfaction and service scores of any company, in any industry, in America. In fact, Charter satisfaction rates notably lower than many government agencies, including the IRS.

Customers have also been annoyed by the fact that Charter has been aggressively raising rates in most of its acquired territories, with many customers saying they're being forced to pay upwards of 40% more for the same service. Charter CEO Tom Rutledge, who at $98 million was the country's highest paid CEO last year, insisted that these customers were simply "mispriced" and Charter was simply "moving them in the right direction."

Most recommended from 22 comments



ptrowski
Got Helix?
Premium Member
join:2005-03-14
Woodstock, CT

13 recommendations

ptrowski

Premium Member

So they really only paid $1 million?

They probably spend more than that on toilet paper for the offices in a year! The other $12 million was set aside as a security. Amazing what these guys get away with.

Packeteers
Premium Member
join:2005-06-18
Forest Hills, NY
Asus RT-AC3100
(Software) Asuswrt-Merlin

5 recommendations

Packeteers

Premium Member

cost of doing business

so charter and state lawyers got paid

but the subscribers who keep getting screwed

by 18mo of much higher rates and much lower services

thanks to the recent merger - get nothing. nice job nys-ag

PapaMidnight
join:2009-01-13
Baltimore, MD

4 recommendations

PapaMidnight

Member

Oh No!

Charter must be quaking in their boots. How will a giant conglomerate like Charter ever meet the burden of a $13,000,000 (USD) fine? Whatever will they do?!

/s
ham3843
join:2015-01-15
USA

2 recommendations

ham3843

Member

Tommy Boy won't learn until....

Just like any petulant punk the only way they will learn to behave in a civil manner
is when you inflict the most painful punishment possible, the fine should have been
immediate revocation of the merger and Tommy Boy should have been prevented from
collecting ANY of his 98.5$ million dollar salary in the future, and he would have to
immediately resign from Charter and not be allowed to be in any executive position at
any business related to this industry.