Back in September 2018, the state of New York ordered Charter to leave: the company had made a bunch of promises about investing in high-speed broadband for New Yorkers as a condition of approval for its acquisition of Time Warner Cable, and then it lied like crazy, defrauding the state and attracting a $172.4M penalty (the largest penalty ever paid by a US ISP); since then, the company has been begging New York state to commute its death sentence and give it another chance.
Even as it was promising that it would do better, Charter spent all of 2018 systematically underinvesting in its network while raising prices and returning massive windfalls to its investors — all tax-free, thanks to Trump’s tax plan, and all permitted, thanks to the FCC’s commitment to “self-policing” by the telcoms industry.
Now, for some fucking reason, the state of New York has given Charter a reprieve. The company will continue to operate in New York State, will not have to divest itself of Time-Warner Cable, and will have to cough up an additional $12m, half of which can be distributed in grants to Charter’s rivals to help them build out competing services. Charter is eligible to bid for the other $6m, to defray the cost of additional broadband rollouts.
Charter also promises, for realsies this time, that it will bring high-speed broadband to 145,000 households in New York. The settlement does not include any admission of wrongdoing by Charter.
New York’s Public Service Commission will open a 60 day notice-and-comment proceeding soon, after which it will have the option to approve or strike down the deal.
Charter is a garbage company. Its New York City technicians have been on strike for two years (!). At issue is that the company has said it will only negotiate a new contract with them if they give up the benefits they were promised in previous contract negotiations — that is, Charter is telling New York that it keeps its promises, even as it is breaking its promises.
Last year, Charter claimed that it had deployed new broadband to more than 86,000 New York homes and businesses since the merger agreement. Charter will be able to count most but not all of those toward the 145,000-location requirement, as the settlement says it will get credit for 64,827 homes and businesses that it deployed broadband to as of December 16, 2018.In addition to the 145,000-location deadline of September 30, 2021, Charter will face six interim deadlines between September 30, 2019 and May 31, 2021. The interim requirements range from 76,521 to 133,586 locations.
If Charter doesn’t meet any of the interim deadlines, it will have to pay $2,800 for each location below the required amount. For example, Charter would have to pay $2.8 million if it fell 1,000 locations short of any of the interim deadlines—though Charter can apply for penalty waivers if there are “extreme weather events” or delays outside of Charter’s control.
Charter avoids getting kicked out of New York, agrees to new merger conditions [Jan Brodkin/Ars Technica]