New York Kicks Spectrum Out Over Broken Customer Promises

The United States has generally allowed ISPs to run roughshod over customers. From the ISP-sponsored legislation that made building municipal broadband networks illegal in many states to Ajit Pai and the GOP’s decision to dismantle net neutrality, companies like Spectrum, Comcast, and AT&T have largely had the run of things — even though these companies are some of the most despised in the United States. But at the state level, things have just gotten surprisingly ugly, with New York State telling Spectrum to pack up and get out.

New York State has withdrawn its approval of the Charter Communications / Time Warner Cable merger because Charter (which now does business as Spectrum) has “made clear that it has no intention of providing the public benefits upon which the Commission’s earlier approval was conditioned.” The company stands accused of failing to meet deadlines, attempting to skirt its requirement to bring new service to rural addresses, its unsafe practices in the field, failure to commit to the obligations it agreed to as part of the 2016 merger, and its purposeful and deliberate attempt to obfuscate its failure to meet those obligations.

“Charter’s repeated failures to serve New Yorkers and honor its commitments are well documented and are only getting worse,” said Commission Chair John B. Rhodes:

After more than a year of administrative enforcement efforts to bring Charter into compliance with the Commission’s merger order, the time has come for stronger actions to protect New Yorkers and the public interest…Charter’s non-compliance and brazenly disrespectful behavior toward New York State and its customers necessitates the actions taken today seeking court-ordered penalties for its failures, and revoking the Charter merger approval.

Charter has admitted that it failed to extend service to the 145,000 rural homes it was required to serve, missing its 2018 goal by more than 40 percent. It has missed every network rollout date since the merger was improved despite claiming otherwise in its own advertising.

Passing Problem

The reason Charter is in such hot water with New York State is related to the requirement that the company extend its service by 145,000 homes. In order to qualify as a newly passed home, the previous service at the address had to be either unserved (less than 25Mbps down) or underserved (less than 100Mbps) down. The individual also had to live in a less-populated area of the state. Charter first failed to meet its milestones in May 2017. A new agreement was reached and Charter submitted its progress report for all of 2017 on January 8, 2018.

Unfortunately for Charter, further investigation of its report found 18,363 addresses that Charter listed as newly passed didn’t qualify for that status. Charter was also required to remove all ineligible addresses from its reports in the future. It submitted its latest report on July 9 — and a further 22,000 ineligible passings were found in this report as well. It is not clear if there were any duplicates between the first set of 18,363 and the later set of 22,000.

Charter, in response, claims that it has done extensive work in New York City and submitted evidence of this work in quarterly filings to the Department of Public Service Staff. As the Public Service Commission notes, however:

At no point in the quarterly plan update process, or otherwise, except as now recently being contested by the Company, has Charter provided any indication that the Company has actually constructed, or ever intended to construct, any passings in the NYC area, until after it has submitted a quarterly filing.

In short, Charter seems to “find” these NYC addresses when it needs to attempt to fulfill requirements from the PSC as opposed to planning the buildouts there (and said buildouts don’t satisfy the demands of its original agreement in the eyes of the PSC itself). The company continues to insist that New York has no authority to penalize it in this fashion and that it has fulfilled the terms of its 2016 agreement.

Spectrum is required to continue to operate its buildouts in New York State for 60 days to avoid service disruptions as the state seeks another provider to take over the business.

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