The New York State Public Service Commission voted on Friday to revoke its approval of Charter Communications' $56.7 billion acquisition of Time Warner Cable, alleging that Charter failed to meet obligations related to its buildout of broadband in the state.
Charter, the second-largest U.S. cable provider behind Comcast, bought Time Warner Cable in 2016 and re-branded it as Spectrum. The deal, along with its purchase of Bright House Networks, gave Charter more scale in the United States. As of March 31, the company, which provides video, voice and Internet services to homes and businesses, reported it had 27.5 million total customer relationships.
Charter agreed to certain conditions to get the deal approved, including delivering broadband speed upgrades to 100 Mbps in New York by the end of 2018, and 300 Mbps by the end of 2019, the commission said. The company also agreed to build out its network to pass an additional 145,000 homes and businesses in the state's less densely populated areas within four years of the deal's close.
The commission said that Charter failed to meet deadlines and obligations to rural communities, and that it purposefully covered up its performance to customers and the commission.
"After more than a year of administrative enforcement efforts to bring Charter into compliance with the Commission's merger order, the time has come for stronger actions to protect New Yorkers and the public interest," Commission Chairman John B. Rhodes said in a statement.
Charter said in a statement that "in the weeks leading up to an election, rhetoric often becomes politically charged. But the fact is that Spectrum has extended the reach of our advanced broadband network to more than 86,000 New York homes and businesses since our merger agreement with the (commission). Our 11,000 diverse and locally based workers, who serve millions of customers in the state every day, remain focused on delivering faster and better broadband to more New Yorkers, as we promised."
Charter shares were down 0.5 percent to $285.37 in afternoon trading, after declining as much as 1 percent.
The commission also said it directed its counsel to file enforcement action with the State Supreme Court, seeking penalties for Charter's past and ongoing failures.
Charter has 60 days to file a plan with the commission to transition its New York customers to other providers, the commission said. Charter can also appeal the commission's decision within 30 days.