New York regulators reach settlement to allow Charter to stay in New York

charter spectrum (charter)
State regulators allow Charter Communications to continue doing business in New York, but it costs Charter an additional $12 million, which will be used to expand broadband in the state. (Charter)

After close to a year of negotations, state utility regulators in New York have approved an agreement with Charter Communications that allows the company to stay in New York.

The ruling, which was announced Thursday by the New York State Public Service Commission (PSC), included the provision that Charter pay an additional $12 million to expand its broadband services in New York.

“Broadband is crucial to driving economic growth and opportunity, especially in communities that are currently unserved or underserved, and Charter needs to deliver broadband access for New Yorkers,” said PSC Commission Chair John Rhodes, in a statement. “Approval of this agreement enables the parties to move forward, without being hampered by the time and cost of litigation, to accomplish our important goals to expand access to high speed broadband. This settlement allows the parties to move forward to deliver broadband access to New Yorkers more swiftly and certainly.”

A year ago, PSC voted in favor of booting Charter out of New York after alleging that Charter, which uses the Spectrum brand for its services, violated the terms of its $78.7 billion deal to buy Time Warner Cable in 2016.

RELATED: Charter: 43% of Time Warner Cable, Bright House customers are in Spectrum packages

After the conditional approval of the merger of Charter and Time Warner Cable, a dispute arose between the Department of Public Services and the Public Service Commission over the terms of Charter's network expansion plans in New York. Thursday's agreement resolved that dispute without any further litigation.

"We’re pleased the PSC has approved the agreement, and we look forward to continuing to serve our customers and expanding the availability of high-speed broadband in New York State," according to a statement emailed to FierceTelecom from Charter." We thank the PSC, Chairman Rhodes, the commissioners and staff for working with us throughout this process."

Under the terms of the new agreement, Charter will expand its network to provide broadband to 145,000 additional residences and business in upstate New York. The expansion can't include New York City addresses, which Charter had previously announced it would build out.

So far, Charter has passed 65,000 of the 145,000 addresses and has until September 2021 to complete the expansion. PSC estimated that Charter will spend more than $600 million on the expansion, which would be more than double the public benefit value estimated by PSC in its 2016 approval.

Charter will put the $12 million in escrow for additional broadband expansion projects at locations to be selected by the Department of Public Service and the New York State Broadband Program Office. Of the $12 million payments, $6 million will be administered by the New York State Broadband Program Office and $6 million will be paid into an escrow fund for work that will be completed by Charter at the State’s direction.

On Thursday, the PSC Commission voted 3-1 in favor of the settlement with commissioner Diane Burman voting "no." According to a story by the Albany Times Union, Burman objected to the process that led to the vote. Burman was on vacation when the PSC held a special session last July to vote on kicking Charter out of New York.

Rhodes, commissioner James Alesi and commissioner Tracey Edwards voted in favor of approving the settlement, according to the Times Union. Edwards, who was appointed last month, was formerly the president of Verizon's northeast operators.