Charter Communications is playing numbers games with its build out obligations and the State of New York’s Public Service Commission is blowing the whistle. Not just stopping the game, but also assessing a $1 million penalty.
As in California, conditions were attached to New York’s approval of Charter’s purchase of Time Warner Cable. Those obligations include “the extension of Charter’s network to pass an additional 145,000 homes and businesses across the State”. Charter has four years to complete that build out and must steadily complete 25% of the job each year.
In January, Charter reported mission accomplished for 2017. But the New York PSC went out and ground truthed Charter’s claims of new homes passed, and found the numbers were inflated. Of the 43,000 homes that Charter said it reached with the required “line extensions”, 12,000 were in New York City which, according to the PSC, was already 100% covered…
In addition to the fact that these addresses have pre-existing network already serving their locations, supported by the lack of pole applications associated with any of these passings…the Commission explicitly stated in the Approval Order that Charter’s buildout was required to occur in “less densely populated and/or line extension areas.” New York City is not such an area.
Even in those less densely populated areas, Charter padded its claims, according to the PSC…
Staff advises that many of these claimed newly completed passings actually consisted of cable and equipment upgrades to existing cable plant. In other words, Charter replaced older cabling and equipment on a pole with newer cabling and equipment, but the location had already been passed by the cable network, oftentimes having been originally passed with cable network for years.
So the PSC crossed another 2,000 homes off the list. As a result, Charter was 8,000 homes short of its 37,000 home obligation and got whacked with a $1 million fine. And faces the threat of losing its New York cable franchises completely if it blows it again. As you might expect, Charter begs to differ, calling the PSC’s conclusions “baseless and legally suspect” and promising to fight the order.
State of New York Public Service Commission, Order to Show Cause, Joint Petition of Charter Communications and Time Warner Cable, 19 March 2018.