Charter Spectrum Won't Get Kicked Out Of New York State After ISP Promises To Suck Less

from the fiftieth-time-will-be-the-charm dept

Last summer, New York State took the historically-unprecedented step of voting to kick Charter Communications (aka Spectrum) out of New York State. Regulators say the company misled them about why it repeatedly failed to adhere to merger conditions affixed to the company’s $86 billion acquisition of Time Warner Cable and Bright House Networks, going so far as to falsify (according to the NY PUC) the number of homes the company expanded service to. The state has also sued the company for failing to deliver advertised broadband speeds, for its shoddy service, and for its terrible customer support.

While the threat was largely unprecedented, there have been indications that this was largely just a negotiations tactic by the state. However sincere the threat was, it appears to have worked. Charter Spectrum and state regulators have struck a new deal (you can find the settlement here, pdf) that will keep the company in NY State, but will require it to actually, you know, try:

“Nine months after a New York government agency ordered Charter to leave the state over its alleged failure to comply with merger conditions, state officials have announced a settlement that will let Charter stay in New York in exchange for further broadband expansions. The settlement will enforce a new version of the original merger conditions and require a $12 million payment, about half of which could help other ISPs deploy broadband.”

As part of the agreement, Charter will agree to expand broadband availability to upstate New York. It’s an area (I grew up in) which, like many US markets, suffers from little to no real competition, thanks in part to phone companies that refuse to upgrade their aging DSL lines (largely because it’s not profitable enough, quickly enough, for Wall Street’s liking). Charter will also be required to pay $12 million to deliver broadband to additional underserved areas, a chunk of which could technically be doled out to competitors if they beat back Charter during a competitive bidding process (often difficult if not impossible).

In a statement, Charter made it clear it was happy the hotly-contested debate was behind it:

“Charter and the Department believe that this action is an important step forward in making high-speed broadband available to all New Yorkers. It allows the parties to move forward with the critical work of expanding access to broadband, by resolving their disagreements without the need for costly litigation. As a result, Charter will invest even more money in New York State than originally planned, bringing the educational, economic and social benefits of high-speed broadband to areas where access is often limited.”

It’s indisputably positive that the state was able to hold Charter’s feet to the fire, expanding access to a notable chunk of underserved users. That said, the settlement really doesn’t address the dysfunction that created this problem in the first place: namely regional telecom monopolies that prioritize mergers and acquisitions over providing quality customer service or expanding into new areas. And they’re routinely able to get away with this behavior because there’s not only limited competition, but such industry giants all but currently dictate federal telecom policy.

Thanks to apathetic telcos and regulatory capture, giants like Charter and Comcast are securing a growing monopoly over broadband in countless markets nationwide, a stranglehold groups like the EFF say pricey 5G service isn’t going to fix. New York State doing its job (a rarity on the state level) is positive, but it doesn’t address the underlying rot at the heart of the issue: a lack of real competition, and zero genuine willingness to embrace creative, pro-competition policies (like community broadband or public/private partnerships) that help address the underlying problem.

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Companies: charter communications, spectrum

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Comments on “Charter Spectrum Won't Get Kicked Out Of New York State After ISP Promises To Suck Less”

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13 Comments
David says:

Sounds like throwing good money after the bad

Let me get this straight: broadband deployment was deplorable so the state paid the incumbent lots of money for promising to fix it. That money was pocketed without return, so now the state pays the incumbent more money for promising to fix it and withdraws the threat of punishment for the previous misappropriation of taxpayer money.

How are the managers going to be able to justify any amount of expense to the board when the company can just keep pocketing money without recompensation other than in the form of pinky swears?

The problem is not just that this is a waste of money, it is a waste of earmarked money. There is no other money available for broadband expansion and Charter just gets to hoover up every bit of it. And when they repeat saying "oops, looks like we did nothing actually", there is no money left to pay any honest company to do the job, so the incumbent gets to keep sitting in place since nobody would work for free and Charter have already razed the budget to the ground.

steell (profile) says:

Re: Sounds like throwing good money after the bad

I think you’re a little confused as to which way the money is flowing this time.

"Charter will also be required to pay $12 million to deliver broadband to additional underserved areas, a chunk of which could technically be doled out to competitors if they beat back Charter during a competitive bidding process (often difficult if not impossible)."

Bamboo Harvester (profile) says:

Re: Re: Sounds like throwing good money after the bad

They can afford twelve million. Since we threw them out of NY, I’ve downgraded my internet/TV package. And my bill has still climbed to almost forty dollars MORE than it was the month they were "thrown out of NY".

I hate to suggest it, but at this point the only resolution that will stop them is price controls.

Anonymous Coward says:

Maybe the real reason that Telecoms get all the deals and their monopolies just keep getting bigger, is that the billionaires running the things and the billionaires in power want to get a tighter rein on the web before anything new gets added, and they know damn well that actual competition in the marketplace would inevitably lead to innovations, new ideas and new user benefits that would very likely make it even more difficult for these lords of capital to take full control of the web. Just saying…

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