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Spectrum Ordered Out Of NYS

State Officials Give Spectrum 60 Days to Plan Exit, but Local legislators are not so sure

Click here to learn how much speed you really need, and click here for what happens if Spectrum leaves New York.
Two weeks ago the New York State Public Service Commission (PSC) rescinded its approval of a merger between Charter Communications (Spectrum) and Time Warner Cable, charging that it had not lived up to promises, and seeking $3 million in financial reparations from the company, $1 million of which was for missing deadlines.  The PSC gave Charter 60 days to file a plan to transfer the franchise to another provider.

"Charter's repeated failures to serve New Yorkers and honor its commitments are well documented and are only getting worse. After more than a year of administrative enforcement efforts to bring Charter into compliance with the Commission’s merger order, the time has come for stronger actions to protect New Yorkers and the public interest," said Commission Chair John B. Rhodes. "Charter’s non-compliance and brazenly disrespectful behavior toward New York State and its customers necessitates the actions taken today seeking court-ordered penalties for its failures, and revoking the Charter merger approval."

Analysts say that Spectrum customers need not panic, at least not yet.  They say that one likely outcome is that Spectrum will come to terms with the PSC and will be allowed to continue doing business in the state.

"I think it remains to be seen whether Spectrum is actually pushed out," says Tompkins County legislator Deborah Dawson (Villages of Lansing and Cayuga Heights). "As I understand it (and I could be way wrong), the State's order would require Spectrum to find someone to take over both their service and their very extensive infrastructure in an unrealistically short period of time.  I just don't see how that can happen.  I would imagine that there is a lot of negotiating going on between the State and Spectrum right now.  We'll just have to wait and see."

The PSC cited Charter’s repeated failures to meet deadlines; Charter’s attempts to skirt obligations to serve rural communities; unsafe practices in the field; Its failure to fully commit to its obligations under the 2016 merger agreement; and the company’s purposeful obfuscation of its performance and compliance obligations to the Commission and its customers as its reasons for rescinding its approval.  Charter filed a response last week requesting information and asking the PSC to identify specific incidences of non-compliance.

But the PSC said that it doesn't believe Charter's claims that missed deadlines were for 'good cause' such as the failure of other companies it deals with, including utility pole providers.

“I find it remarkable that the state says Spectrum hasn’t fulfilled its charter and yet let NYSEG slide in not providing natural gas hookups in Lansing," says Tompkins County Legislator (Lansing) Mike Sigler. "Spectrum just made a large investment in Lansing, putting cable up Peruville road. It took them 15 years, but it’s there. I’m afraid I kind of see this like the Governor trying to regulate dinosaurs. People are cutting the cable. Spectrum provides quite a bit of news through it’s cable station, but how long can that continue when subscribers are fleeing. It’s the same problem local newspapers have. Since it’s now an option, I’m now looking at them for internet service, because my internet provider raised rates. I support more competition, not less. Do I think some other cable company will do a better job? It’s not like the other cable companies reviews are all sunshine and roses either.”

Charter is the largest cable provider in New York, with a potential of 5 million customers within its service areas.  It currently serves about 2 million customers in 1,150 communities, providing Internet access, telephone, and television services.  To obtain the New York market, the company made a commitment to provide more rural Internet access to 140,000 homes across the state that were deemed to be under-served or not served at all.  The company also committed to raising broadband speed to 100mbps by the end of this year, and to 300mbps by the end of 2019 as a condition of state approval of the merger.

In a press release the PSC said, "Despite missing every network expansion target since the merger was approved in 2016, Charter has falsely claimed in advertisements it is exceeding its commitments to the State and is on track to deliver its network expansion. This led to the Commission’s general counsel referring a false advertising claim to the Attorney General’s office for enforcement."

But Dawson says that in contrast with PSC claims, Tompkins County negotiations with Spectrum have yielded some positive results.

"My experience with Spectrum's Internet service has been pretty positive," she says. "That's pretty interesting, since New York's gripe with Spectrum is based on the company's failure to provide high-speed Internet service throughout its service area. I haven't heard any complaints about Spectrum's Internet service. Instead, I've heard a LOT of complaints about what the company has done to its basic cable offering, and specifically about its decision to remove WENY and WSKG from the line-up. I've been working on this problem for several months with Legislative Chair Martha Robertson and Ithaca City Councilman George McGonigal, and I'm pleased to report that WENY and Spectrum have worked out a deal that allows WENY to return to the basic cable lineup with an all local content channel (including local news and sports), starting on August 30. Over time, WENY will be developing more local content, and would welcome our input as to what that could include."

Charter immediately announced it would stop such advertising.  It is safe to assume that the company will do what it can to retain one of the largest cable markets in the United States.  But the company will have to do much more than that if they want to continue to serve New York.

Cable TV subscribers has been steadily declining, with the popularity of streaming TV apps such as Netflix.  Over 22 million subscribers dropping cable TV in 2017.  This quarter alone 744,000 subscribers dropped cable TV.

According to BROADBANDNOW, Internet access reaches 96% of New Yorkers, with about 6% under-served.  New York is the 4th most connected state in the country.  The site also says Ithaca has 98.8% coverage, spread among 19 providers, with speeds ranging between 6mbps and 1,000mbps, depending on the provider.  Spectrum ranks second in speed with 300mbps level of service available.  Fiberspark offers up to 1,000mbps, but only covers 8.4% of the city.  The list does not include local providers Lightlink (up to 25mbps upload and download speeds) and Clarity Connect (up to 10 mbps in New York State).

Cable TV generated $81 billion in revenue in 2016, with Comcast capturing 24.1% of the market in 2017.  Over 51 million households were hooked up to cable in 2017.

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