NY Officials Allege Charter 'Misrepresentations' on Broadband Build; Consultant Doubts 'Drastic' Action

Charter Communications should cease and desist saying it complied with -- and exceeded -- New York state obligations to expand its broadband network, agency officials said Tuesday. “These misrepresentations, coupled with Spectrum's overall pattern of unacceptable conduct in New York, call into question the continued viability of Spectrum as a regulated telephone/cable company in this State,” said New York Public Service Commission General Counsel Paul Agresta in a letter to CEO Thomas Rutledge. Spectrum is a Charter brand name. The Department of Public Service referred the matter to the New York attorney general and the SEC, Agresta said. The agency seeks a log of “all such advertising in advance of potential direct enforcement action for penalties” by the New York Public Service Commission, he said. “Preserve all documents, including email, text messages, voice mail, recordings, and other documentation relating to the aforementioned matters.” Charter never told customers about missing a December buildout target that was a New York condition of the carrier's Time Warner Cable acquisition, but instead “continues to assert in advertisements and publications that it has complied with -- and even exceeded -- its commitments to New York,” Agresta said. “Those representations are demonstrably and materially false.” The PSC earlier fined the MVPD $2 million over the charge that it missed the buildout target (see 1806140063). It’s not the first time New York claimed the company misled consumers, added Agresta, referring to the state AG’s lawsuit about the company’s advertised internet speeds that last week got court OK to continue (see 1806210060). “The situation regarding Charter/Spectrum is getting more serious with each passing day,” said PSC Chair John Rhodes, agreeing the company is misleading consumers. The operator “built out our broadband network to more than 42,000 unserved or underserved homes since the merger,” a spokesperson responded. “We find it baffling that the PSC thinks that some New Yorkers count and others don’t, given their belief that access to broadband is essential for economic development and social equity.” New York is unlikely “to do anything drastic,” cable consultant Steve Effros emailed Tuesday. “The regulators, after all, have made strong accusations against most operators in the State at one time or another. This reflects either unreasonable expectations or a regrettable form of negotiating leverage.” Effros doubts New York could find another company to replace Charter that could better meet the state’s timing demands.