ALBANY – The state may require Charter Communications to put $12 million toward expanding its services across New York and pay $1 million to provide equipment to low-income customers for not moving more quickly on the work as part of its purchase of Time Warner Cable Inc.
The state Department of Public Service announced Tuesday the tentative agreement with Charter, saying the company failed to meet its schedule to build out its cable network as required in last year’s approval of Charter’s deal to buy Time Warner Cable.
“The commission conditioned its approval of the merger on Charter’s agreement to undertake several types of investments and other activities,” Gregg Sayre, the department's interim CEO, said 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.”
The problem with the PSC is the latest trouble for Charter in New York as it transitions its Time Warner Cable services to Spectrum.
Customers have expressed frustration with the changes and higher rates, and Attorney General Eric Schneiderman sued the company in February alleging it of bilking customers on advertised internet speeds.
In a statement, Charter said its work is continuing to expand services through New York.
Charter is the largest cable provider in New York with more than 2 million subscribers, including in New York City and the state's largest upstate cities: Buffalo, Rochester, Syracuse and Albany.
"Charter has met and even exceeded the vast majority of our key year-one commitments in New York associated with the merger," the Stamford, Conn.-based company said in a statement.
The company said any delays were only a function of getting approvals to add poles in parts of the state. "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," Charter's statement continued.
In January 2016, the PSC approved Charter’s purchase of Time Warner Cable, but installed a series of conditions -- such as faster broadband speeds over the next two years and the addition of 145,000 under-served homes and businesses to its network.
The PSC said Charter reported it completed the first speed upgrade ahead of schedule last month, but only extended its service to less than half of the customers required in the first year.
The agreement required the company to extend its network to an additional 145,000 homes and businesses by 2020 -- 36,250 premises per year. But only 15,164 were added so far, the state said.
The agreement with the state Tuesday would require Charter to pay $1 million in grants for equipment to provide computer and internet access to low-income users.
Charter would also have to set aside $12 million "as a security to meet its network expansion commitment going forward," the PSC said.
Charter would also have to notify New York customers within 60 days of the settlement's execution of the status of its expansion.
The settlement offer has been issued for public comment online, and it will then require final commission approval to take effect.