The State of New York is moving to evict its largest internet and cable provider for failing to deliver on fast connection promises that had won it approval two years ago for a merger with Time Warner Cable.
The deal was that rural areas would get high-speed internet access as a result of the merger, but the company—Spectrum (of Charter Communications)—didn’t make it happen on time.
New York is livid, and not only is it revoking Spectrum’s contract, but it’s also revoking its approval of the merger and seeking $3 million in penalties.
In the meantime, in order to cover the gap in internet services for customers, the state is requiring Spectrum to continue to operate for two months while the state seeks a replacement company.
Spectrum ended up getting its broadband network to around 86,000 homes and businesses in New York, but the deal was 145,000 additional addresses.
And while the State of New York is lashing out at Spectrum’s non-compliance with the deal, it’s also playing hardball over what it has called the company’s “brazenly disrespectful behavior toward New York State and its customers”.
That combination, said Public Service Commission chair John B. Rhodes, “necessitates the actions taken today seeking court-ordered penalties for its failures, and revoking the Charter merger approval”.
But things are about to get trickier. The state is demanding that Spectrum handle the transition itself and figure out a smooth way to hand over its operations to another provider by selling its assets, according to Fortune. Related: Steel Stocks Struggle Following Trump’s EU Tariff Concession
Spectrum, in the meantime, seems to think this is a Trump-style negotiation: Grave threats designed to light a fire under its high-speed commitment. The company has also suggested the move was “politically motivated”, though no clear logic was presented for this argument.
The latest moves follow the Public Service Commission’s $2-million fine for Spectrum in June, citing failure to meet expansion goals. That fine was sparked by what local officials say was false reporting by Spectrum when the company illegitimately added 12,000 NYC addresses to its expansion list.
Now that fine is up to $3 million as of Friday, when upped the ante for missed deadlines.
While claiming that the whole thing is “politically motivated”, Spectrum/Charter is also blaming giant rival Verizon, saying that the company is limiting its access to telephone poles.
"In the face of Verizon’s intransigence, Charter has been unable to satisfy the milestones in the Buildout Condition," Charter said. Essentially, Spectrum/Charter is claiming that Verizon is illegally blocking its use of telephone poles and hindering Charter’s ability to attach wires to poles owned or co-owned by Verizon.
Charter is the second-largest cable company in the U.S. after Comcast, but its own customers rank it poorly.
More than anything, the state’s battle with this giant internet and cable provider is a sign of the times: There’s a serious slack of competition in this field, and customers who have been paying the price now seem to have the support of their state governments.
The message is this: deliver or pay the price, and if you don’t there are increasing cord-cutting options out here.
According to Fortune, the first quarter of this year saw a new cord-cutting record, with over 780,000 customers ditching their cable subscriptions. America now has more than 20 million households without cable, as streaming services become more attractive.
By Michael Kern for Safehaven.com
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