Charter Communications will fork over $13 million to the New York State Department of Public Service for failing to meet a network expansion deadline set as part of its Time Warner Cable acquisition approval.
When the New York Public Service Commission approved Charter’s takeover in January 2016, it did so on the condition that Charter would deliver broadband speed upgrades of 100 Mbps statewide by the end of 2018. That figure was set to increase to 300 Mbps by the end of 2019. Additionally, Charter agreed to expand its network to pass an additional 145,000 unserved or under-served homes and businesses within four years of the transaction’s close.
Charter reports it completed its first speed upgrade ahead of schedule last month, but the Commission notes the operator’s network extension passed less than half – or 15,164 – of the 36,250 premises it was obligated to touch in the first year.
“The Commission conditioned its approval of the merger on Charter’s agreement to undertake several types of investments and other activities. 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,” Department Interim CEO Gregg C. Sayre comments.
Charter says it was behind schedule due to permitting delays.
“Charter has met and even exceeded the vast majority of our key year-one commitments in New York associated with the merger. Delays in pole-attachment approvals and make-ready by pole owners made it impossible to extend our network to the targeted number of homes in the first year post-merger – an important fact that the settlement appropriately reflects,” the company notes in a statement. “Thousands of Upstate consumers now have access to Spectrum services where approvals and make-ready have occurred, and we have a solid deployment plan to reach the thousands of additional homes in our commitment.”
The $13 million settlement reached by the Commission and Charter will be divvied up into a $1 million chunk of grants for equipment to provide computer and internet access to low-income users, as well as a $12 million security that it will meet its commitments going forward. The latter includes a reaffirmed pledge to its build-out requirement of 145,000 new passings in 21,646 increments over six periods through May 18, 2020. If Charter fails to meet this obligation, it will forfeit its right to earn back up to $1 million for each six-month target. According to the Commission, the actual amount forfeited will depend on how badly Charter misses the mark.
Additionally, Charter will have 60 days to develop a communications plan to inform New Yorkers whether they are part of the build-out plan.