New York Approves Charter/TWC/BHN With Conditions
The New York Public Service Commission approved Charter Communications' planned buys of Bright House Networks and Time Warner Cable with conditions Friday. That came as Gov. Andrew Cuomo (D) announced the launch of his state broadband initiative aiming to guarantee every New Yorker access to high-speed Internet by the end of 2018, said a news release from the N.Y. Department of Public Service (DPS). Charter has to accept PSC conditions before the proceeding can be closed in New York.
California (see 1512070052), Hawaii (see 1511180038) and New Jersey haven’t approved the deal. The FCC and Department of Justice also need to give it a green light (see 1601040061). Representatives from the California Public Utilities Commission and the N.J. Division of Rate Counsel didn't comment.
As a part of the New York-imposed conditions, Charter must upgrade its broadband system to deliver at least 100 Mbps statewide by the end of 2018, and 300 Mbps by the end of 2019, the PSC order said. The conditions also specify that the company will have to install line extensions that will bring high-speed broadband to 145,000-plus unserved and underserved homes and businesses, it said. Charter will also be required to create a new low-income broadband program with minimum speeds of 30 Mbps at $14.99 available for 700,000 low-income households. If Charter accepts the conditions, the company will also have to invest $50 million to improve customer service and achieve a 35 percent reduction in the rate of cable customer complaints in five years, the order said. If the company fails to meet that condition, it will trigger up to $5 million in additional investment.
The PSC also requires Charter to provide free broadband to 50 community centers in underserved areas. Charter also will be required to commit to no net job losses among customer-facing employees in New York state for four years, the order said, and require Charter to adhere to a “most-favored state” provision that requires the company to ensure that its offered stand-alone products and services in New York will be equal to, or better than, any key commitments made or offerings in any other state. “The rapid evolution of technology spurred by the Internet has profoundly changed what we need from our cable and telecommunication providers,” said PSC Chairwoman Audrey Zibelman. “Technological convergence has occurred and the very essence of a world-class communications infrastructure in this state depends upon the strength of its broadband networks. This decision is a game-changer in the telecommunications arena.”
The conditions aren't merger-specific, Common Cause New York Executive Director Susan Lerner said in an interview Friday. All of the conditions are services all residents of New York should be able to access regardless of a pending transaction, she said. The conditions highlight a fundamental issue with broadband in the country: lack of choice, Lerner said. In a healthy market, competitors have to serve consumers at multiple price points, she said. While affordable service for low-income families is important, neither Charter nor TWC needs to become further monopolized to be able to offer those services, Lerner said. “It should be basic service for all Internet providers and not something which has to be negotiated to allow a merger to go forward,” Lerner said. “These are just general, basic service requirements which should be satisfied without special conditions.” Common Cause New York doesn't support the deals because they're not financially stable transactions, among other reasons, she said.
With this approval, the commission has shown it wants to improve broadband connectivity across the state, said Charles Davidson and Michael Santorelli, directors of the Advanced Communications Law and Policy Institute at New York Law School, in a joint statement Friday. The decision also assures New York will remain in the “vanguard of harnessing the power of high-speed Internet connectivity” and ensure that its “disruptive potential” is realized in key communities, they said.
The approval puts the transactions in a “strong position” as the companies work to prove the deals are in the public interest as they await approval from several other states, the Department of Justice and the FCC, Charter said in a news release Friday. "This is a significant step forward, not only for Charter but also for our future customers," Charter President Tom Rutledge said. TWC didn't comment.
The PSC order approving Charter/TWC/BHN, together with Cuomo’s New NY Broadband initiative, will significantly increase broadband availability for millions of New Yorkers across the state, the DPS news release said. The initiative is a public-private partnership that will bring “last-mile” broadband services to New Yorkers and significantly expand connectivity in the most remote regions of the state, it said. “Access to high-speed Internet in New York shouldn’t be limited by your zip code,” Cuomo said. “The merger of Time Warner Cable and Charter Communications will result in a historic investment in New York’s Internet landscape that improves quality, reliability, speed and affordability for all New Yorkers. Alongside our New NY Broadband Program, we are bridging the digital divide for underserved communities and guaranteeing our position as a national leader in opportunity, cutting-edge technology and innovation.”