Charter negotiating with NY to avoid being kicked out of the state

Now six weeks after New York government officials ordered Charter Communications to leave the state, Charter has received two deadline extensions and is trying to negotiate a deal that would let it keep operating in New York.

The New York State Public Service Commission (PSC) voted on July 27 to revoke its approval of Charter's 2016 purchase of Time Warner Cable (TWC) and gave Charter 60 days to file a plan for transferring the network to another provider. New York alleges that Charter hasn't expanded its network enough to meet broadband deployment requirements that it agreed to in order to get the merger approved. Charter claims it has met the requirements, and it vowed to fight the order to leave the state.

But there's still a chance that Charter and New York could strike a deal that would avert a lengthy court battle and sale of the network to a new provider. Charter was originally ordered to submit an exit plan by September 25 and to leave the state six months after that. But the PSC has now granted two extensions, resulting in a November 8 deadline for filing an exit plan and a May 8, 2019 date for leaving New York. In the meantime, both sides say they've been having productive talks.

In its latest extension request, filed on Friday, Charter wrote:

Good cause exists to further extend this deadline. Charter and the Department have been involved over the past few weeks in productive dialogue regarding the Revocation Order as well as the July Compliance Order and the related special proceeding initiated by the Commission in the [state] Supreme Court pursuant to the July Compliance Order. As part of that dialogue, Charter has been assembling additional information regarding broadband deployment efforts in New York for the Department's and the Commission's review. A further extension would allow additional time for discussions between Charter and the Department before the initiation by Charter of additional Commission or court proceedings. Additional proceedings before the Commission and/or the courts would have the potential to divert the resources of both Charter and the Department from discussions regarding both orders, and could have the effect of making it more difficult to resolve the issues raised by the orders without litigation.

Charter must behave, NY says

The PSC issued an order granting the second deadline extension on Monday and offered a similarly positive assessment of the current talks. Among other things, the PSC noted that Charter stopped airing misleading advertisements about the pace of its broadband deployment:

[G]iven the productive dialogue that is ongoing between the Company and Staff, the commitments made by Charter not to air false or misleading advertisements, the work underway by the Company to comply with the network expansion condition, and Charter's continued obligations to comply with the Public Service Law and regulations, extensions of an additional 30 days to file a petition for rehearing and file the Six-Month Exit Plan are warranted to allow for further discussions while both sides reserve their respective legal rights.

Despite the extensions, New York's order to Charter that it must leave the state is still in force. The PSC said the extensions may help create "a more thorough record and process before the Commission" in order to "provide for an orderly transition to one or more successor providers."

The PSC also reminded Charter to behave during the extension. The extension is "contingent upon the continuation of productive engagement and dialogue by Charter, the absence of misleading advertisements, and Charter's continuing obligation to comply with the New York State Public Service Law and related regulations and requirements," the PSC said.

The PSC vote to extend the deadline was 3-1, with Commissioner Diane Burman opposing it, according to Stop the Cap. "Burman argued the commission’s recent approval of time extensions in the Charter case could set a precedent that could take the regulatory agency down a road where companies like Charter and other utilities could delay proceedings by having informal private talks with Commission staff," the news site wrote.

If New York and Charter can't reach an agreement, Charter isn't likely to leave the state without a fight. As Charter CEO Tom Rutledge previously said, "we have a very strong legal case and ability to defend ourselves. It could play out over a lengthy period of time if required."

Disclosure: The Advance/Newhouse Partnership, which owns 13 percent of Charter, is part of Advance Publications. Advance Publications owns Condé Nast, which owns Ars Technica.