NEWS

NY regulators approve TWC, Charter deal with conditions

Jon Campbell
@JonCampbellGAN
Time Warner Cable's office on Mount Hope Avenue in Rochester.

ALBANY -- State regulators voted Friday to approve the proposed $55 billion sale of Time Warner Cable to Charter Communications, but only if Charter agrees to significantly boost Internet speeds upstate.

The state Public Service Commission unanimously approved an order that would allow the mega-deal between the two cable giants to move ahead in New York pending federal approval.

The regulatory board used the opportunity to impose conditions on the sale that are designed to expand and speed up broadband Internet, particularly in rural areas that are currently underserved.

As it stands, Time Warner currently has 2.6 million cable television, Internet and phone subscribers across New York, including in New York City and upstate’s largest cities.

“I’m hopeful with all of these conditions, we really are going to be in a position that in the next several years, we’re going to see all New Yorkers have access to well-priced, high-speed, modern Internet services,” said Audrey Zibelman, chair of the Public Service Commission.

The order requires Charter to offer Internet speeds of 100 mbps by the end of 2018 and 300 mbps by the following year, while expanding its Internet service area to include 145,000 residential units that currently don’t have broadband access.

As it stands, Time Warner offers speeds of up to 300 mbps in the New York City area, but only 50 mbps in the rest of the state.

Charter would also be required to invest $50 million in its customer-service operation and would face restrictions on cutting back on employees that interact with customers.

The company would also be required to continue Time Warner’s lowest tier of Internet service, which is available for $14.99 a month, for two years for new customers and three years for existing ones.

A $14.99-a-month plan will also be available for households that qualify for reduced-price school lunches and seniors who qualify for Supplemental Security Income.

In order to approve the deal, the Public Service Commission -- which regulates the state's utilities and cable companies -- had to find it would have a "net positive benefit" on New York.

Without the conditions, the state Department of Public Service said the sale would carry no public benefit. With the conditions, however, the agency estimated it would have a $1 billion economic impact on the state, which includes the boost in Internet speeds.

Charter and Time Warner have seven days to notify the Public Service Commission whether they intend to comply with the order.

“This is a significant step forward, not only for Charter but also for our future customers, and we are very happy to have obtained this approval from the New York State PSC,” Charter president and CEO Tom Rutledge said in a statement.

The major cable merger still needs approval from the Federal Communications Commission, which is still reviewing the merger, which would also combine cable provider Bright House Network under the Charter flag.

If approved by the FCC, Charter would become the third-largest cable-television provider in the country, with 17.3 million subscribers. The company would also have more than 19 million broadband subscribers.

Gov. Andrew Cuomo, who has backed state tax grants for companies to expand broadband access to the state’s rural areas, said the Time Warner-Charter merger will “result in a historic investment in New York’s Internet landscape.”

“Access to high-speed Internet in New York shouldn’t be limited by your zip code,” he said in a statement.