Charter CEO threatens lawsuit over New York’s attempt to kick Spectrum out of the stateAugust 1, 2018
When New York’s Public Service Commission ordered Spectrum to pack up and end operations in the state — and even come up with a transition plan within 60 days for switching customers over to a replacement internet / TV provider — I don’t think anyone believed things would actually play out that way. Sure enough, the CEO of Charter (Spectrum’s parent company) says his company is willing to engage in a “lengthy” legal battle in New York if the situation can’t otherwise be resolved outside of a courtroom.
“We believe we’re in compliance with the plain reading of the buildout requirements that the state imposed on us in merger conditions, and we have a very strong legal case and ability to defend ourselves,” said chief executive Tom Rutledge during Charter’s earnings call on Tuesday. “It could play out over a lengthy period of time if required.”
“Just to put it in perspective, we’re operating in 41 states. We have thousands of franchise agreements. Generally, we have good relationships with the communities we serve and we live up to our commitments, and we have in New York State,” he added. “We’re hopeful that we can work all this out, but if necessary, we’ll litigate. And we believe we’re in the right.” Ars Technica reported on the comments today.
New York state’s PSC voted on Friday to revoke and rescind its approval of Charter’s 2016 buyout of Time Warner Cable, which effectively reverses the deal. The order gave Charter 60 days to file a plan for an “orderly transition” to a successor provider — or several of them. “The commission is requiring a six-month plan for Charter to cease operations in areas formerly served by TWC to coincide,” the PSC wrote in its filing. For Charter, that could mean selling off all of its Time Warner Cable assets in New York. Time Warner Cable operated in 29 states pre-acquisition, so Spectrum still maintains that business footprint in the rest of them. But New York is one of the company’s most critical markets.
The Public Service Commission is accusing Spectrum of several different instances of business misconduct and says the company has repeatedly failed to comply with agreements regarding service expansion. On Friday, Charter fired back with a statement that accused New York of playing politics with its vote and said “Spectrum has extended the reach of our advanced broadband network to more than 86,000 New York homes and businesses since our merger agreement with the (commission).”
Conditions under the company’s agreement with New York called for Charter “to pass an additional 145,000 un-served or under-served homes and businesses in the state’s less densely populated areas within four years of the closing of the transaction.” The PSC says Charter isn’t making enough progress on that front.
The commission’s order allows Charter to request an extension for the 60-day filing deadline, but obviously Charter wants this decision to be walked back entirely through negotiations. If no resolution is struck and Charter fails to meet the order’s requirements, the PSC said it “will take further steps, including seeking injunctive relief in Supreme Court in order to protect New York consumers.”
But if you’re a Spectrum customer, the odds that you’re going to find yourself on a different provider within a couple months are slim to none. This is only getting started.