The $17.7 billion acquisition of Cablevision by Altice is now likely to close in the middle of June following recommended approval of the deal by the New York State Public Service Commission (PSC). New York will vote on the transaction on June 16, a postponement from the initial voting date, which was scheduled for May 20.
The New York PSC handed down its recommendation with several comments and recommended conditions. First, the Commission noted that while many originally opposed the acquisition of Cablevision Systems Corp. (NYSE: CVC), circumstances have changed in favor of would-be buyer Altice . The Federal Communications Commission (FCC) has now approved the deal at a national level, and one of the major early opponents -- the Communications Workers of America (CWA) -- has also reversed its position to support the deal. (See Altice Clears Hurdle in Cablevision Buy, Wins FCC Approval.)
Further, the PSC noted that Cablevision still faces significant competition from Verizon Communications Inc. (NYSE: VZ) in New York, which should keep pressure on Altice to maintain and improve the quality of its cable services in the region.
The state of New York isn't willing to bless the Cablevision sale without some conditions, however. The Commission wants to impose a requirement that Altice not be allowed to lay off any workers in the state for four years. In addition, the PSC recommends that Altice be required to share a quarter of the efficiencies gained through the transaction -- estimated to be $450 million -- with the people of New York.
The PSC has also put specific parameters around some of Altice's promises. While Altice has said it would increase downstream broadband speeds in New York to 300 Mbit/s, the Commission wants the company to meet that threshold by the end of 2017. In the Town of Milan and Dutchess County, New York, where wireline service isn't available today, the Commission wants assurances from Altice that service will be made available by the end of 2018.
Additional conditions include:
- A clear set of qualifications for low-income residents seeking less expensive service
- Free broadband service available at 40 community anchor institutions
- Ongoing monitoring of Cablevision's customer service quality
- A commitment to reduce active components in the Cablevision network
- Free WiFi and other services during declared emergencies
- The promise that New York residents will get the all-in-one media hub device that Altice plans to develop within three years of the close of the deal
- Most-favored-nation status, guaranteeing that no other customer regions gain more favorable terms with Cablevision than the state of New York
With the acquisition of Cablevision now all but approved, Altice is set to become one of the major players in the US cable market as of next month. The new Altice US customer base -- including Cablevision and Suddenlink, which was bought out last December -- will include 3.7 million video, 4 million broadband and 2.7 million voice subscribers. (See Coming Soon: The New Cable Trinity.)
— Mari Silbey, Senior Editor, Cable/Video, Light Reading