Ralph Romano is still on hold with Charter Spectrum, waiting to report an outage that began late Sunday evening in his apartment in the Jamaica, Queens neighborhood.

“You sit on hold for an hour and then the call disconnects, which is exactly the kind of treatment you know you are going to get from this shabby operation,” an angry Romano tells Stop the Cap! “I am 72 years old and ran my own business for 46 years. If I treated my customers the way this cable company does, I would have been out of business in 4-6 months. I don’t know how they did it but Spectrum is even worse than Time Warner Cable.”

Romano is one of dozens of customers reportedly experiencing a multi-day outage in Queens. For some, the outage takes out phone, internet and television service but for others, internet service is the worst affected.

Romano’s neighbor gave up on wasting her cell phone minutes on hold to report the outage. She took a taxi to the Spectrum Store in Elmhurst and then waited over 90 minutes before someone called on her.

NYC rats are not to be trifled with. This one is taking a slice home on the subway.

“I just wanted to report the outage, not turn in equipment or pay a bill, but the door greeter could care less,” Sandra e-mailed us. “They want your name and then they can’t be bothered. I watched people come in after me get called up to pay their bill, sometimes with a sack of change spilled out on the table that took 15 minutes to count. It was infuriating. When they finally called me, I was helped by Mr. ‘I Don’t Care’ who wanted my account information, then said my cable box appeared to be fine. He never tested the internet modem, which is where the problem was. When I told him the whole building was out, he said he couldn’t take reports about other people and they would have to come down themselves to report the trouble. He gave me a $5 credit for service we still don’t have back. Useless.”

“We have a lot of elderly people in this building so they are not going to run down to Spectrum and wait for hours to report a problem that could be discussed over the phone,” Romano said.

Like several other buildings in Queens, there are no immediate alternatives. Although Verizon claims FiOS is available to the building where Romano lives, the only neighbor who ordered it waited two months for engineering work and then had his order summarily canceled without explanation. The building owner warned FiOS is not available because Verizon was unwilling to place its incoming cables in the appropriate conduit, which is rat-resistant.

“The rats, which can be fend off by companies like pest control green bay, around here eat anything, especially cables,” Romano said. “Everyone seems to know that except Verizon.”

Over in Kew Gardens, intermittent internet access from Spectrum is often a fact of life.

Espinal

“When it rains, the internet is gone,” says Ana López. “You might get 15 minutes worth of use, but then the cable modem light starts blinking and the service is just gone. We have called them at least 10 times, and the riff-raff they send out here couldn’t find their rear end with their hands. Since the strike, the people who knew what they were doing must be on the picket lines because the guys taking their place are scary stupid. One suddenly decided to replace some inside wiring, but he ended up ripping the cable out of the wall by mistake and tore up the plaster. One thing they did make sure to do was laugh when they cut the old Verizon (FiOS) cable the old tenants must have used and then let it fall inside the wall. The other guy accidentally dropped one of his tools into my aquarium.”

López has repeatedly told them the problem has to be outside because it does not rain inside her home, but the latest contractor she dealt with confided he doesn’t climb poles unless absolutely necessary because “he is afraid of heights. ¡Dios mío! I am not lying to you.”

Unsurprisingly, the technicians did not fix the problem. As the problems in Queens mount, Rafael Espinal, chairman of the Committee on Consumer Affairs and Business Licensing in the New York City Council, has set up his own website to take complaints about Charter Spectrum across the city. “FixMyCableNow.com” does not appear to forward complaints on to Spectrum, but angry and dissatisfied customers can get more responsive service for unresolved problems by filing an online complaint with the N.Y. Attorney General’s office.

An attorney for Charter Communications revealed that company officials and New York telecom regulators were engaged in a “productive dialogue” over how to resolve the state’s dispute with the cable operator.

In written requests to extend the deadlines for a rehearing of the decision to revoke Charter’s merger with Time Warner Cable and file an “exit plan” to leave New York State, Helmer revealed the two sides were engaged in substantial talks to resolve their differences.

“Good cause exists to further extend the deadlines [….],” wrote Maureen O. Helmer, counsel for Charter Communications. “Charter and the Department [of Public Service] have been involved over the past few weeks in productive dialogue regarding the July Orders as well as the related special proceeding initiated by the Commission in the Supreme Court.”

Helmer added that Charter has been “assembling additional information” about its criticized rural broadband expansion program for review by the Public Service Commission, which decided in late July to evict Charter/Spectrum from New York for consistently failing to meet its merger obligations with the state.

Charter’s lawyer suggests it is in the Commission’s best interest to accept additional delays in the deadlines to file a rehearing appeal of the July eviction order (requesting an extension until Oct. 10, 2018) and to file an orderly exit plan (requesting an extension until Nov. 8, 2018).

“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,” Helmer wrote.

There is an increasing likelihood the Public Service Commission’s July order effectively throwing Charter Communications out of New York State was actually a hardball, last-ditch negotiating tactic, potentially to extract additional conditions and more rigid compliance with the orders of the Public Service Commission.

Charter officials originally claimed the July eviction order was an example of election year politics by the governor and a striking union. New York Gov. Andrew Cuomo, who has repeatedly slammed Charter/Spectrum for its performance in New York, is running for re-election. The International Brotherhood of Electrical Workers (IBEW) also continues to strike Charter in the New York City area, attracting support from local politicians.

A Commission that is amenable to Charter’s request for a second delay in meeting its deadlines to file paperwork would send a clear signal the PSC is no longer intent on throwing the cable operator out of the state.

The PSC’s July order rescinding the approval of Charter’s acquisition of Time Warner Cable was based ironically, in part, on Charter’s frequent failure to meet the state’s deadlines.

The founding family of Cablevision is suing Altice USA, the company that acquired the suburban New York cable operator in 2016, for violating terms of the merger and committing fraud after laying off staff at Optimum’s News 12 operation.

This week the Dolan family — the founders and original owners of the suburban New York City cable system, filed a lawsuit in Delaware Chancery Court after learning the notorious budget-slashing executives at Altice laid off dozens of workers, with plans to cut many more, despite a merger commitment to maintain at least 462 workers at the news operation and accept financial losses of up to $60 million until 2020.

News 12 is unique in the downstate New York, New Jersey, and Connecticut area where Cablevision provides cable service, delivering “hyper-local” coverage of news events across individually programmed regional news stations, each targeting a different service area. News 12 was among the first cable operator-created local news operations, founded in 1986 by Cablevision founder Charles Dolan.

Over the next three decades, News 12 launched several unique channels to serve customers:

• News 12 The Bronx/Brooklyn (shared studios/talent, but branded individually to each borough)
• News 12 Connecticut
• News 12 Hudson Valley
• News 12 Long Island
• News 12 New Jersey
• News 12 Traffic and Weather
• News 12 Westchester

Originally exclusive to Cablevision, News 12 has since been licensed for viewing by cable customers of Charter Spectrum, Comcast, and Service Electric across the Tri-State area. Altogether, News 12 reaches about three million viewers in the region.

The lawsuit is an effort to preserve the legacy of News 12 in light of Altice’s legendary reputation for layoffs and budget cuts.

Charles Dolan

“Unfortunately for the employees of News 12, Altice has disregarded its solemn promise to operate News 12” as promised, the lawsuit claims. “The purpose of today’s lawsuit is to enforce Altice’s contractual commitment to stand by the employees of News 12. The Dolan family intends to hold Altice accountable for commitments Altice made at the time of the sale and to protect the quality programming News 12 provides the community.”

The lawsuit alleges Altice USA already laid off 70 News 12 employees in 2017 and notified the Dolans last month it would begin laying off additional workers beginning this week, including popular News 12 anchor Colleen McVey. McVey is a co-plaintiff in the lawsuit.

The fate of News 12 was a key issue for the Dolan family during merger talks with Altice. At one point, the family demanded News 12 be spun off as an independent entity not controlled by Altice because of fears the company’s cost-cutters would decimate the news operation. Ultimately, the merger agreement contained language forbidding Altice from laying off News 12 staff except in certain circumstances. The Dolan family claims there is no justification for the layoffs. Altice disagrees, claiming the suit has no merit.

“Altice USA remains committed to offering meaningful news coverage, enhancing our news product for our local communities, and growing our audience,” an Altice USA statement said. “Under Altice USA’s leadership, News 12 remains the most viewed TV network in Optimum households. This achievement reflects the uniqueness of News 12’s hyperlocal content and the high value viewers place on news that is tailored to their neighborhoods. Local news has never been more important, and we’re proud that News 12 continues to be a trusted source of news and information in the communities we serve.”

Molinaro

Charter Communications has found itself an ally in Marc Molinaro, Republican candidate for New York’s governor, who attacked Gov. Andrew Cuomo on Tuesday for ordering the removal of Spectrum from New York State.

“We’ve got a megalomaniac on our hands, a veritable ‘Putin on the Hudson,'” Molinaro charged, defending the cable company for being attacked by the governor and “his surrogates” for political purposes.

Cuomo “put his thumb on the scale of a major PSC decision,” said Molinaro. “I think Andrew Cuomo got furious with NY1 News and effectively pulled the plug on an entire cable system as punishment to NY1, and as a warning to others he can affect who dare to ask him tough questions.”

Molinaro has repeatedly claimed the Public Service Commission is in the back pocket of the governor’s office.

Cuomo vs. NY1 – Spectrum’s 24-hour news channel in New York City

Molinaro’s campaign has been critical of an ongoing spat between the governor and reporters from NY1, Spectrum’s 24-hour news channel in New York City.

Earlier this month, Cuomo bristled at a question about improper campaign contributions from Crystal Run Healthcare, a health insurance provider in Middletown. NY1 reporter Zack Fink asked if the governor was considering returning those contributions and launching an internal investigation.

Gov. Cuomo

GOV. CUOMO: […] If the ongoing investigation finds any fraud, then as we’ve always done, we will return the donations. That’s standard operating procedure. We’re doing it in this case; we’ve always done it.

But speaking of fraud, Charter Spectrum has been executing fraud on the people of this state. They were given a franchise for a very specific set of conditions. It is a very valuable franchise. Many companies could have been given the franchise. Charter Spectrum said that they would increase cable access to the poor and rural communities around the state. That was the condition of them getting the franchise. I promised this state 100% high-speed broadband. Why? Because high-speed broadband is going to be the great equalizer, the great democratizer.

Whether you’re a business, an individual, you’re going to need high-speed broadband to be competitive. Charter Spectrum defrauded this state. They are defrauding consumers. Charter Spectrum is running ads that say we are ahead of schedule and at no cost to the taxpayer. The Public Service Commission said they’re behind schedule, not on schedule, and certainly not ahead of schedule. And to say it is no cost to the taxpayers is also a fraud, because that’s the condition upon which the taxpayers gave you the franchise. So you are defrauding the people of this state. That’s a fraud.

Fink

ZACK FINK (NY1): You said the PSC is looking into new operators. Is it the PSC’s place to do that or is it the market’s?

GOV. CUOMO: Are you speaking on behalf of Charter Spectrum or yourself?

ZACK FINK (NY1): No, I’m just asking a question. You brought it up so I’m curious. You said Friday that the PSC was looking at potential new operators.

GOV. CUOMO: Well, the Public Service Commission is saying that Charter Spectrum violated their franchise agreement. If you violate your franchise agreement, then you lose the franchise agreement and then they would have to find another operator without disruption to any of the consumers or the good workers of Charter Spectrum.

Viewers of NY1, a Spectrum News channel, never saw this exchange, which was widely covered elsewhere by the New York media. Viewers also didn’t see an on-the-record call-in by the governor made later than day to NY1’s newsroom to discuss the exchange. News of the call leaked after nobody at NY1 would publicly discuss it or why the news channel refused to air it.

Cuomo’s opponents on both his left and right criticized the governor over his treatment of the NY1 reporter.

“I’ll come right out and say it. It looks to me like Andrew Cuomo is trying to send a chilling message to the news media, ’don’t mess with me’, and I hope the inspector general can prove me wrong,” Molinaro said in a statement.

This week, Molinaro turned up the heat by claiming the governor was “acting more like a third-world dictator trying to intimidate the news media into dropping stories than an elected democratic leader who respects the First Amendment and has nothing to fear from it.”

Cynthia Nixon, running for the Democratic nomination to the left of Cuomo politically, claimed his chastising of NY1 reporters was out of line, resembling how Donald Trump treats the press.

“Cuomo can’t hold himself up as New York’s answer to Donald Trump, and simultaneously threaten members of the press for doing their job,” Nixon said, asking the governor to apologize.

Cuomo’s spokesman Rich Azzopardi claimed the ongoing criticism of Charter is nothing new for Gov. Cuomo.

“The governor answered his question and made the same statement that he has made to Charter Spectrum reporters and reporters statewide numerous times over the past few months, communicating the facts of the state’s two-year dispute with Charter for failing to serve the citizens of the state,” Azzopardi said.

Cuomo has made offhand remarks about Charter since the company replaced Time Warner Cable in 2016. He criticized NY1 and other Spectrum News stations around the state for not covering the IBEW strike against the cable company or a lawsuit filed by the state attorney general over the cable company’s failure to deliver on advertised broadband speeds.

“They virtually blacked it out,” Cuomo said of Spectrum News during a press event held on the day the PSC voted to drop Charter as a provider in New York.

Azzopardi also denied Molinaro’s accusation that the governor was involved in the PSC’s decision to force Charter to leave New York and dismissed the Republican opponent for spreading unproven “conspiracy theories.”

Cuomo is widely expected to be re-elected, with both Nixon and Molinaro running significantly behind the governor in polls. The primary is on Sept. 13.

Gov. Andrew Cuomo discusses Charter’s broken promises to New York State during a visit to Rochester, N.Y.  (Courtesy: Democrat & Chronicle) (2:28)

Moving on out?

New York’s Public Service Commission on Friday set the stage for ‘an orderly transition’ ending Spectrum’s brief life in New York, to be replaced with a ‘to be announced’ new cable operator to serve the needs of New York subscribers.

Or so the New York Public Service Commission hopes.

Although Friday’s 4-0 unanimous decision to revoke Charter’s merger deal in New York is a public relations and legal nightmare for the country’s second largest cable operator, we suspect top executives are getting a good night’s sleep tonight, not too concerned about the immediate consequences of today’s stunning vote.

Losing New York is what Wall Street would call “a materially adverse event” for any cable operator. New York City is the country’s largest media market. Billions of dollars worth of cable infrastructure, subscriber and advertising revenue, and prestige are at stake. Despite the ‘vote to revoke,’ Charter’s attorneys have signaled for weeks they intend to preserve and protect the cable company’s legal rights, and it is almost certain the PSC’s merger revocation order will meet a court-ordered injunction as soon as next week.

The courts are likely to make the final decision about whether Spectrum can stay or has to go. That aforementioned injunction will stop the clock on any ‘rash action’ and start what could be years of litigation, filled with discovery, endless hearings, stall tactics, blizzards of motions, appeals, more appeals, and then more lawsuits over whatever final exit plan is eventually filed, if one is required by the courts. A judge could also order the cable company and the state to work it out in a court-approved settlement, something the PSC seems loathe to do in its two orders published today which make it clear the regulator is done talking only to feel strung along by the cable company.

For the near term, Spectrum customers won’t notice a thing. Even if the PSC was not taken to court, Charter has 60 days to file a six month transition plan, making the earliest date to waive Spectrum goodbye is sometime in early 2019.

To help readers out, we’ve prepared a short FAQ to address any concerns:

Q. Will I lose my cable and internet service?

A. No. Regardless of what happens, the PSC has ordered a transition plan designed to provide a seamless switch between Spectrum and a future provider. For most customers, it will resemble Charter’s own transition from Time Warner Cable to Spectrum.

Q. Who will replace Spectrum?

Not again.

A. The cable industry often resembles a cartel, whose members go to great lengths to protect each other. Historically, no large cable operator will entertain requests for proposals from cities or states requesting a replacement of a cable company already providing service. In short, if a city is fed up with Comcast and wants to shop around for another provider, it is highly unlikely Charter/Spectrum, Cox, Altice/Cablevision, Mediacom, or other providers will submit a bid to replace Comcast. If they did, Comcast could theoretically retaliate in their service areas. Should the Public Service Commission itself solicit bids to replace Spectrum, it is unlikely any operator will send a proposal unless/until Charter indicates it wants to leave the state. This kind of informal protectionism has proven highly effective limiting the power of towns and cities to play companies off each other to get a better deal for their residents.

Q. If Charter loses its court challenge and has to leave, what happens then?

A. If Charter exhausts its appeals and realizes it can no longer do business in New York, it will seek a private sale or system swap with another provider. Comcast would be the most likely contender, having shown prior interest in serving New York and having contiguous cable operations in adjoining states, especially in northern New England, Massachusetts, Pennsylvania and New Jersey. Comcast could agree to trade its cable systems in states like Texas, Florida, or California in return for its New York State’s Spectrum systems, which cover cities across the state. But that is likely years away.

Q. Isn’t Comcast worse than what we have now with Spectrum?

A. Consumer satisfaction surveys suggest the answer is yes. Comcast is routinely rock bottom in customer satisfaction, customer service, pricing, and service options. Its 1 TB data cap on internet service has not yet reached many of its northeastern customers, but most observers expect it eventually will. In contrast, Charter has agreed not to impose data caps for up to seven years after its 2016 merger. But Comcast has delivered more frequent broadband speed upgrades and has more advanced set-top boxes and infrastructure.

Stop the Cap! would vociferously oppose Comcast’s entry in New York, however, just as we did a few years ago when we participated in the successful fight to stop Comcast’s merger attempt with Time Warner Cable.

Q, What other providers might be interested?

A. Altice, which does business as Cablevision or Optimum, is New York’s other big cable operator, providing service exclusively downstate. Altice had aggressive plans to become a big player in the U.S. cable business, but its acquisition dreams were halted by shareholders, concerned about the European company’s already staggering debt, run up acquiring other companies. Altice is currently scrapping Cablevision’s existing Hybrid Fiber Coax infrastructure and replacing it with direct fiber to the home service, which offers improved service. But the company charges a lot for its advanced set-top box, has bloated modem rental fees, and is notorious for vicious cost-cutting, which stalled service improvements at its mobile and cable companies in France and raised a lot of controversy among employees.

Cox could be another contender, but would have to find a few billion to acquire Spectrum’s statewide system. Wild card players include AT&T and Verizon. Verizon would face extreme regulatory challenges, however, because it is the local phone company for most residents in the state. AT&T sold its U-verse system in Connecticut to Frontier Communications and seems increasingly focused on content, not on the systems that deliver content. A hedge fund or private equity firm could also be contenders, but perhaps not considering the high cost to acquire the systems and New York’s reputation for fierce customer protection. Remember, New York insists that a cable company ownership transfer must meet public interest tests, not simply enrich hedge fund participants.

Q. What happens to Charter’s pre-existing deal conditions on rural broadband and speed increases?

A. Officially, the PSC has ordered Charter to continue abiding by the 2016 Merger Order and its deal commitments. The state will likely continue to fine Charter if it keeps missing rural broadband rollout targets until a court stops them or the company leaves. Charter will probably continue rural broadband expansion to show good faith. Charter has met its merger obligations related to speed increases, so it is not currently out of compliance. But a legal challenge offers the opportunity for a third-party judge to suspend or modify existing deal commitments, at least temporarily. It is unlikely Charter will want to invest large sums in its cable systems if it believes it will lose its case in court. The timetable for an upgrade to 200 Mbps Standard speed will likely now occur on a regional basis. The northeast division will still likely activate these speeds across multiple cities in the region sometime this summer, especially in places where it faces competitive pressure. The 300 Mbps upgrade in 2019 is more likely to be impacted by any forthcoming legal action.

Q. Is this political or about the union striking Charter? It is an election year.

A. All things are political to some degree in an election year in New York. That said, the New York Public Service Commission has the nation’s best track record of protecting consumers from bad actor telecom and energy companies. They take their responsibilities very seriously, and have shown consistent independence from the governor’s office, especially in recent years. The Commission was by far the most responsive of any state, including California, in taking our concerns about the Charter/Time Warner Cable merger seriously, and incorporated several of our suggestions into the final Merger Order. We warned the PSC cable companies have routinely reneged or slipped through deal conditions. We even predicted Charter would attempt to count new buildouts in non-rural areas and business office parks towards any commitment to expand their service areas. The PSC smartly conditioned its Merger Order by defining the goal of Charter’s broadband expansion — serving the unserved and underserved. That is why the company is not getting away with counting New York City buildouts towards this commitment.

Cynthia Nixon and Andrew Cuomo, both running for New York governor, neither fans of Charter Spectrum.

Few voters are likely to tie a PSC decision to the governor’s race, although Gov. Andrew Cuomo has repeatedly taken credit and praised the PSC for not tolerating bad behavior from Spectrum. If it was a purely political play, it would originate in the governor’s office. Gov. Cuomo’s Broadband for All program depends on achieving near-100% broadband penetration, something it may not manage if Charter fails its rural buildout commitments. That would be a PR mess. There is ample evidence that Charter’s own conduct was sufficient to trigger this kind of response, with or without an election looming.

New York is also a union-friendly state, and the International Brotherhood of Electrical Workers (IBEW) Local 3 has held out for over a year in the New York City area striking to preserve important job benefits Charter wants to discontinue. New revelations from the PSC outlining Charter’s increasingly bad safety record has strengthened the union’s case that Charter would rather bring in unqualified replacement workers and put safety at risk than settling with a union that essentially built the cable system serving New York City. There is no credible evidence that the union is involved in the PSC’s decision to revoke the merger agreement, although we suspect most affected members will fully support the decision.

Q. Is the PSC being too harsh? Can’t they work it out with Charter?

A. For New York to revoke a merger and effectively boot the company out of business in the state is remarkable. Utility companies that irresponsibly lack a credible disaster plan or do not comply with industry standards to maintain tree trimming and infrastructure repairs that result in plunging parts of upstate into darkness for up to two weeks after wind storms in two consecutive years were fined, but not ordered to leave. The ongoing scandal of competing private ESCO electric companies that have almost all scandalously overcharged New Yorkers with electric bills higher than their incumbent utility have been threatened with de-certification and fines, but are still conducting business, even though much of their marketing material was misleading.

Is it too late to work it out?

That should tell you the PSC’s move today was a final straw. The two parties have negotiated and debated Spectrum’s performance lapses for nearly a year. Tension was clearly rising by the spring after the PSC uncovered evidence Charter was intentionally counting areas it knew were outside of the spirit and language of the merger order’s rural broadband deal commitments. Charter’s brazen behavior achieved a new low when it questioned the PSC’s authority to oversee the merger agreement Charter signed. At one point, it unilaterally announced it would only honor the deal commitments found in one appendix of the Merger Order, conveniently ignoring the section describing and defining the rural broadband commitment Charter agreed to. The company also continued to air what the PSC declared to be false advertising, promoting Charter’s claimed accomplishments in rural broadband expansion. Charter repeatedly ignored warnings to suspend and remove those ads. In fact, the PSC issued strongly worded warnings to Charter at least twice, specifically outlining the possibility of canceling the merger agreement and forcing Spectrum out of the state. In response, Charter began staking out its legal arguments in filings, obviously preparing for litigation.

The PSC would probably argue it is impossible to work things out with a company that repeatedly breaks its own commitments. The PSC also openly worried what message it would send to other regulated utilities if it did not react strongly to Charter’s behavior. If the company had a corporate agenda to cheat New York out of important rural broadband expansion, negotiating, fining, and sanctioning a company is unlikely to change its behavior at the top.

Stop the Cap! had earlier recommended the PSC adopt new sanctions to force Charter to comply with its commitments, and expand them to bring service to many New Yorkers who were left behind by Gov. Cuomo’s Broadband for All program, suddenly saddled with satellite internet service. A large percentage of those affected are frustratingly close to nearby Spectrum service areas and although it would cost Charter a significant sum to reach them, it would deliver a financial sting for their bad behavior while also bringing much-needed internet access to the leftovers left-behind by the governor’s broadband expansion program. Such a settlement would require the company to actually comply with their commitments, something the PSC had been unable to achieve through no fault of their own. Perhaps a judge might have better luck should a negotiated settlement come up in litigation.