State regulators voted Friday to revoke their 2016 approval of the merger between Charter Communications and Time Warner Cable and gave Charter 60 days to develop a plan to find another operator for its New York communications business.
The state Public Service Commission's action effectively orders Charter to find a way to sell off its Spectrum cable television, Internet and telephone businesses, which serve more than 2 million customers statewide.
Charter almost certainly will fight any attempts by the commission to force it to give up control of its New York holdings, potentially prolonging the dispute, but also giving the two sides more time to settle their differences in what has become an unusually acrimonious and public spat that the company believes is politically motivated.
But Charter, on Friday, was not saying what steps it plans to take to fight the PSC's attempt to force it out of the state. Charter shareholders largely shrugged off the challenge from New York regulators, with Charter's stock falling by just 62 cents to $286.29 on Friday.
The move is an escalation of the PSC's battle with Charter over the state's contention that it failed to expand its Spectrum cable network as promised after the Time Warner acquisition two years ago.
The PSC has repeatedly said that Charter failed to meet its promises to greatly expand its services across the state, including an expansion of its network to about 145,000 unserved or underserved homes by May 2020.
Charter, however, has said it is on pace to meet the targets included in the merger agreement and blamed politics for the escalating dispute with the state. The company was required to add more than 58,000 homes to its network by May 2018.
"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 PSC," Charter said in a statement.
The PSC already has fined Charter $2 million for missing its targets, and it said Friday that it would fine the company another $1 million for not meeting its June milestone. The PSC also said it would seek additional penalties against the company in state Supreme Court.
“Charter's repeated failures to serve New Yorkers and honor its commitments are well-documented and are only getting worse," said John B. Rhodes, the PSC chairman, in a statement.
"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,” Rhodes said.
The rhetoric from PSC officials has been becoming steadily harsher toward Charter. Rhodes last week said there was a "gaping hole" between the company's commitments and performance and accused the company of making "patently false and misleading claims."
On Friday, Rhodes continued to sharply criticize Charter, accusing it of "brazenly disrespectful behavior," while the commission accused the company of being interested only in "lining its pockets."