NY State Levies $13M Fine on Charter

Calling it the "largest cable company financial settlement of its kind in state history and possibly the largest in the nation's," the New York State Public Service Commission has announced the approval of a $13 million fine on Charter for failing to meet broadband buildout requirements following its acquisition of Time Warner Cable.

The news isn't a shock, as Charter Communications Inc. agreed to the proposed terms of the settlement back in June. However, it does show that the PSC takes its role seriously as an advocate for New York residents against sometimes-overreaching corporate ambition. (See Charter M&A Mishap May Mean $13M Fee.)

In this case, Charter had promised to deliver broadband services to 145,000 new locations in New York by May 2020, including 36,250 new premises by May 2017, but the cable company only reached 15,164 new sites by the 2017 deadline. In addition to the fine it must now pay, Charter has also had to agree to a new timeline for broadband deployments. That timeline still ends with 145,000 new passings by May 2020, but Charter must now also meet six new interim deadlines in the meantime.

The fine isn't as harsh as it sounds. Charter has to set aside $1 million to help low-income customers, but the rest of the $13 million fee can be earned back by the cable company if it meets the state's new deadlines. Charter will forfeit up to $1 million of its earn-back potential each time it misses a new six-month target.

Ironically, Charter has blamed delays in pole-attachment approvals for failing to meet its buildout requirements in New York in the first place. In contrast, Charter sued the local government in Louisville, Ky., last fall when it tried to make the pole-attachment approval process easier for new broadband providers like Google Fiber Inc. .

The battle by telcos for access to public rights of way -- including access to public utility and light poles -- in cities and states is a growing one. The telecom industry as a whole argues that the permitting process has to be streamlined in order to build out next-generation communications networks. However, telco demands are often in conflict with what government officials say they need to ensure that residents get equitable access to new broadband and smart city services. (See Cities Slam FCC on Broadband Proceedings.)

Meanwhile, New York specifically has had trouble with Charter as a partner before. State Attorney General Eric Schneiderman is currently suing Charter for continuously promising Internet speeds it knew it could not deliver. (See NY State Sues Charter for Broadband Fraud.)

— Mari Silbey, Senior Editor, Cable/Video, Light Reading

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