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Charter Communications agrees to $13M settlement

The state Department of Public Service and Charter Communications Inc.—the largest cable provider in the state—have reached a $13 million settlement over the company’s failure to meet requirements of its 2016 acquisition of Time Warner Cable Inc., officials announced Tuesday.

Charter Communications failed to build out its cable network as required by the deal, which closed in January of last year.

“The commission conditioned its approval of the merger on Charter’s agreement to undertake several types of investments and other activities,” said Gregg Sayre, department interim CEO, in a statement. “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.”

Under the settlement agreement, Charter has agreed to pay $1 million in grants for equipment to provide computer and internet access to low-income users, and to set aside $12 million as a security to meet its network expansion commitment going forward, officials said.

The conditions required by the Public Service Commission for approval of the Time Warner deal included:

  • Delivering broadband speed upgrades to 100 mbps statewide by the end of 2018 and 300 mbps by the end of 2019; and
  • Building out Charter’s network to pass an additional 145,000 un-served or under-served homes and businesses within four years of the closing of the transaction.

Charter reported it achieved the first speed upgrade ahead of schedule, as of May 18, however, it had only extended its network to pass 15,164 of the 36,250 premises it was required to pass in the first year.

The telecommunications firm has committed to completing its build-out requirement of 145,000 new passings in 21,646 increments over six periods through May 18, 2020, under the deal. Charter also has agreed to develop a communications plan within 60 days of the settlement’s execution to inform New Yorkers whether they are part of the build-out plan, officials said.

“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 said 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 firm will forfeit its right to earn back up to $1 million each time it misses a six-month build-out target.

The actual amount forfeited will vary, depending upon the percentage of the target missed and whether or not Charter can demonstrate it has timely performed specific tasks, officials said.

Follow Kerry Feltner on Twitter: @KerryFeltner

(c) 2017 Rochester Business Journal. To obtain permission to reprint this article, call 585-363-7269 or email madams@bridgetowermedia.com.

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