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New York Orders Charter Out of State (arstechnica.com) 94

Yesterday, it was reported that Charter Communications could lose its license in New York because of its failure to meet merger-related broadband deployment commitments. Today, according to Ars Technica, the New York State Public Service Commission (PSC) voted to revoke its approval of Charter Communications' 2016 purchase of Time Warner Cable (TWC). "The PSC said it is ordering Charter to sell the former TWC system that it purchased in New York, and it's 'bring[ing] an enforcement action in State Supreme Court to seek additional penalties for Charter's past failures and ongoing non-compliance," reports Ars. From the report: Charter has repeatedly failed to meet deadlines for broadband expansions that were required in exchange for merger approval, state officials said. The PSC has steadily increased the pressure on Charter with fines and threats, but Charter never agreed to changes demanded by state officials. As a result of today's vote, "Charter is ordered to file within 60 days a plan with the Commission to ensure an orderly transition to a successor provider(s)," the PSC's announcement said. "During the transition process, Charter must continue to comply with all local franchises it holds in New York State and all obligations under the Public Service Law and the Commission regulations. Charter must ensure no interruption in service is experienced by customers, and, in the event that Charter does not do so, the Commission will take further steps, including seeking injunctive relief in Supreme Court in order to protect New York consumers." The five types of misconduct that the commission cited to support its decision include: the company's repeated failures to meet deadlines; Charter's attempts to skirt obligations to serve rural communities; unsafe practices in the field; its failure to fully commit to its obligations under the 2016 merger agreement; and the company's purposeful obfuscation of its performance and compliance obligations to the Commission and its customers.
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New York Orders Charter Out of State

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  • Nelson says (Score:3, Funny)

    by Anonymous Coward on Friday July 27, 2018 @04:55PM (#57020948)

    HA! HA!

    • by Anonymous Coward

      FCC and the interstate commerce clause tells NY state to go fuck itself.

      • Re:Nelson says (Score:5, Insightful)

        by Areyoukiddingme ( 1289470 ) on Friday July 27, 2018 @07:01PM (#57021520)

        FCC and the interstate commerce clause tells NY state to go fuck itself.

        Neither has any bearing. Charter bought a legal entity that exists in New York State. They must comply with state law in the operations of that entity. They didn't. They lose.

        • by Anonymous Coward

          Charter can buy how ever it wanted where ever it wants. NY has zero authority to prevent this.

  • by Anonymous Coward

    Anybody care to comment on the odds of municipalities being able to pick up some of these assets to run on their own?

    • by zlives ( 2009072 )

      that would be awesome but highly unlikely

    • by goombah99 ( 560566 ) on Friday July 27, 2018 @05:33PM (#57021130)

      My first thought is what does ordering out of state mean? The fiber they own, the Right-a-ways they own, any contractual monoplies they own and existing service contracts they own are property with value. Will they be able to sell these assets? If not it's a seizure of private property. Perhaps they will be allowed to continue service providing just not solicit new bussiness? Perhaps they will be allowed to lease these to another service provider?
      What I might guess is that they spin off a company called "not-Charter" and then sell or lease these assets to this wholly separate company. A holding company is created to hold both Charter and "not-charter" so one company now owns both companies (like Alphabet).
      Municipalities might try to fit to edge into this but how? not-charter has a competitive advantage of the customer base and existing lines. Municipalities might try to lease the lines but then they are just leasing charter stuff. They could start building out their own but things like right-aways on poles and properties will be a difficult thicket. Witness how Google fiber got screwed out of space on poles and conduits because they were not a registered telecom or lacked monopoly grants.
      Ironically the thicket of regulations that might seem like limits of cable companies are lobbied for by these companies to create entry barriers. THey like paying for rights of way because it denies others. There are often state wide laws that prohibit a municipality from competing with private enterprise. Municipalities are not allowed to favor one company over another by gifting them anything (anti-donation clauses to avoid graft).

      Thus charter exits, and non-charter enters. The customer's ID number on their bills doesn't even change. The profits all go to the holding company and the same share holders as before.

      Cuomo moves on to the senate, and then charter donates to the campaign for his replacement. three years from Now charter buys out "non-charter".

      • Re: (Score:3, Informative)

        by Anonymous Coward

        I think it's likely that Charter really would sell the assets to a distinctly different cable company rather than a subsidiary created for the purpose of evading NY's order. It's entirely possible that those assets would be purchased by a company like Comcast or Cox, neither of which is much of an improvement over Charter. It's also possible that a company like Verizon might want into the cable business, something that's been discussed previously. I doubt that Verizon would be a significant improvement,

      • by Anonymous Coward on Friday July 27, 2018 @05:48PM (#57021190)

        It means the State of New York revokes Charter's ability to carry on public utility business within the State. More importantly, it must divest itself of those business units that are under the PSC's regulatory discretion and do so in a manner that does not interrupt service to the customers. Failing to do so will incur additional penalties, for which the PSC is ready to take those proceedings all the way to the Supreme Court if needed.

        In other words, a corporation is going to find out very quickly that you just don't fuck with the regulatory bodies of a sovereign power.

      • Re: (Score:3, Informative)

        by jeff4747 ( 256583 )

        They're required to sell the infrastructure to someone else. If they fail to do so in a timely manner, then eminent domain-style action will probably take place.

        • Not eminent domain, they will simply setup their own public auction and give the proceeds to the Company.

      • by Areyoukiddingme ( 1289470 ) on Friday July 27, 2018 @07:12PM (#57021572)

        My first thought is what does ordering out of state mean? The fiber they own, the Right-a-ways they own, any contractual monoplies they own and existing service contracts they own are property with value. Will they be able to sell these assets? If not it's a seizure of private property.

        Which is entirely legal in New York State. After Kelo v. City of New London several states amended their constitutions to prevent economic takings. Others passed laws forbidding it. New York did neither [castlecoalition.org]. If Charter refuses to do as ordered, NYS can and will use eminent domain to force them to, and they will succeed, very quickly by modern judicial standards, because of Kelo. It won't even make it out of federal circuit court.

      • Equally likely is Cuomo moves on to the federal penitentiary adjoining Shel Silver's cell.

    • We see how stupid politicians end up being when they try to do their own job. Imagine them trying to run an ISP! ROTFL

      • They are not trying to run an ISP dipshit, they are enforcing a legally binding contract, which is what lawyers do, and I would say most politicians are lawyers. So they are doing what the fuck they are paid and trained to do.
        • >> municipalities being able to pick up some of these assets to run on their own?

          > not trying to run an ISP dipshit

          Reading comprehension fail.

  • The NYS PSC (Score:5, Interesting)

    by rlitman ( 911048 ) on Friday July 27, 2018 @04:58PM (#57020958)
    wields a very heavy hammer. Frankly, I'm amazed that Charter would so flagrantly disregard them, as every other utility here takes PSC complaints VERY seriously. I guess this will keep the rest even more in line.
    • The phrase I believe you're looking for is "pour encourager les autres", which yes... one would hope that this will do.

      OTOH, if Charter isn't filing for an injunction in court by Monday to stay the order pending, uh... "negotiation of financial instruments which definitely aren't going to the politician over there watching from the corner" I will be *shocked*.

    • You sign an agreement then either you abide by it or you get hit with the hammer.

  • Charter told Ars that it plans to fight the PSC's order to sell the former Time Warner Cable system

    Should charter take this to the Federal supreme court, where they will probably win, I hope NY adds a 99% revenue tax (not profit) on charter. An ACA court case seemed to say if it is a tax the state can do what it wants

    I wish my state had the balls NY seem to have now in reeling in this corrupt industry/p?

    • by zlives ( 2009072 )

      can charter take this particular case to SCOTUS?

      • by jmccue ( 834797 )

        can charter take this particular case to SCOTUS?

        I would think so, the article states charter will be visiting the NY Supreme Court for this already. So where else would they be able to appeal to ?

        • Re:Shoud the win (Score:5, Informative)

          by KixWooder ( 5232441 ) on Friday July 27, 2018 @05:14PM (#57021044)
          SCOTUS tends to stay out of state matters such as this (single state, no opposing rulings in various circuit courts). State supreme court is probably as high as they can go. They could appeal to SCOTUS, but it's doubtful they would take the case.
          • The highest court in NYS is, somewhat confusingly, the Court of Appeals (source [nycourts.gov]). So NY Supreme Court would likely be the court of original jurisdiction.
        • by tsstahl ( 812393 )

          In New York, the Supreme Court is the bottom--the actual trial court. Sounds impressive and looks it on a business card, I suppose.

        • The New York State Court of Appeals
      • Well itâ(TM)s the supreme law of the land so if they can come up with a constitutional reason they can certainly try. Whether the court will hear it is another matter.

      • This is a state case in the state system. It can only go to the SCOTUS if they can get into the federal system. This requires them to show some kind of federal jurisdiction or a constitutional issue.

        If they can make this showing, they can go to the US District Court. If they lose there, they go to the US Appeals Court for that district. If they lose there, they appeal to the SCOTUS (and good luck with that; they decide less than 150 cases each year out of about 7000 requests).

        However, the issues at play

    • It seems like a simple contract dispute, the merger was approved on an agreement with Charter with regards to certain obligations. Charter did not meet it's obligations under the agreement, it failed to rectify them after being given time... so the agreement is null and void. I don't see it as much of an issue for the Supreme Court.
      • by guruevi ( 827432 )

        Charter claims that they "did" fulfill those obligations. This is just saber-rattling by lawmakers for the November elections, once December rolls around, this will all be 'resolved'.

        Charter has directly given $556,970.60 in the last two years to the same people that are complaining, most of it right before the Charter/TWC merger was approved.

        • If Chgarter did fulfill the obligations then it can present this in court. If the court decides that they broke the agreement though then tough luck for them.

    • That tax would have to apply to ALL cable providers, so Comcast and cox would get same tax else could rule it illegal to single out 1 company like it does. Further more take 1 guess who will feel the major brunt of that tax? Yes the people of NY so in the end people of the state would be worse off. That is just common sense.
      • by HiThere ( 15173 )

        I'm sure they could structure it so it just happened to only apply to Charter. Say a tax on promised services that haven't been delivered or some such.

    • unconstitutional. I hate to say it, but with Trump's victory all branches above Dog Catcher belong to the the corporatists. As bad as Hilary was she wasn't 100% anti-consumer/pro-corporate, she was just a clueless rich person trapped in a bubble. The folks using Trump (and make no mistake, he's being used) are the worst sort. They'll rule against any law that gets in their way.

      It's going to take 50 years to undo the damage, longer if we don't wake up.
  • by Translation Error ( 1176675 ) on Friday July 27, 2018 @05:01PM (#57020980)
    Wow, a cable company failing to live up to its promises and obligations and actually being smacked hard for it? I am shocked and amazed. Which is sad.
    • by zlives ( 2009072 )

      i am just waiting to be disappointed when verizon comes in to buy the leftovers,

    • Wow, a cable company failing to live up to its promises and obligations and actually being smacked hard for it? I am shocked and amazed. Which is sad.

      We'd be better off without a PUC preventing competition, but since they're there it's amazing to see them actually enforce their rules. The regulatory-capture revolving door must be temporarily out of order.

    • by guruevi ( 827432 )

      Smacked hard? Lol: Charter was a big "donor" to Cuomo for both AG and Governor.

      Cuomo received $116,957,462.05 from corporations in the last 10 years (he also has his PAC and "Friends of Cuomo" entities which I haven't even included). Top of the list: Charter/TWC.

  • Nice! (Score:4, Insightful)

    by Gravis Zero ( 934156 ) on Friday July 27, 2018 @05:11PM (#57021034)

    It's good to see these soulless corporations held to account for their bullshit. I hope NY now tries to make it easier for smaller telecomm companies to provide services to would-be consumers.

    • Most likely the contract will go to Comcast, and consumers will be subjected to arbitrary bandwidth rationing. Government is the ultimate corporate racket, it is not here to help.
  • by snapsnap ( 5451726 ) on Friday July 27, 2018 @05:19PM (#57021062)

    Most of the city has a government-granted monopoly given to Comcast and as far as I know, they haven't expanded service in years. I have a few friends that live in the Wave area, and I'm jealous of the prices they pay and the bandwidth they have.

    • by Anonymous Coward

      Seattle's broadband problems are entirely self inflicted.

    • Most of the city has a government-granted monopoly given to Comcast and as far as I know,

      Then you know wrong, since exclusive franchises have been illegal by federal law for more than 20 years.

      • And yet there are all sorts of ways to allow or even encourage a de facto monopoly without violating that federal law.

        • A de facto monopoly is not a government-granted one. When someone complains that a cable company has a government-granted monopoly, then they are either ignorant or deliberately spreading misinformation.

          There are also many reasons for de facto monopolies, none of which have anything to do with franchising or federal law. Of COURSE a municipality can ALLOW a de facto monopoly. It isn't against the law for a de facto monopoly to exist.

          But this has NOTHING to do with ISPs, because there has NEVER been a gov

  • ... but it is "a humiliating kick in the crotch". I can think of a few other cable companies that deserve one.

  • by Snotnose ( 212196 ) on Friday July 27, 2018 @07:46PM (#57021720)
    Someone actually went to bat for us plebes. Way to go!

    Then again, my 60 y/o cynical self thinks it's more like they didn't grease enough palms.
  • After 12 years of trying to get cable service 5 power poles up my road via 3 diff companies (Adelphia, Time Warner, and now Spectrum), there was some hope this March. On a whim I called the # for Spectrum I just saw on TV, the CSR says "Oh yeah, we just opened up that service area to new orders and you are the first!". "Great, Let's do it!" I said. "2 weeks....blah blah blah". 3 weeks later, no return call, so I call... "Oh, your address is un-serviceable," they say. "Three weeks ago you said I was," I rep

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