New York State Public Service Commission has revoked its approval for Charter Communications’ 2016 $55 billion Time Warner Cable acquisition, claiming failure to live up to promises.
When it came in to snatch Time Warner Cable from Comcast’s failed acquisition bid, Charter Communications was creating the country’s second largest ISP. Although for deals like this, there are always strings attached. In Charter’s case, it won the approval from FCC stakeholders after promising, among other things, to extend high-speed broadband connections to the hitherto under-served areas in the states the new company would operate in.
In its announcement on July 27, the Commission claimed Charter has failed to add an additional 145,000 households and businesses in New York State’s rural areas to the internet network. Specifically, the Commission listed five areas where Charter has not fulfilled its promises:
- 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
As a result, the Commission is asking Charter to sell its Time Warner Cable assets, and to find a successor to carry out its obligations within 60 days. Charter said it would appeal.
If merging two businesses is complex and expensive, it is no less so to break a combined business that has been in operation for two years. The “Time Warner” brand is currently also involved in another, more expensive merger case with AT&T, which is also facing the danger of being forced to de-merge.