For the last year and a half, while Charter/Spectrum has been accused of dragging its feet on rural broadband rollouts across New York State and is now threatened with franchise revocation, the company had plenty of time to spare waiting out the International Brotherhood of Electrical Workers Local 3, who have been on strike to protest a pay-and-benefits-race-to-the-bottom in the New York City.

The strike has attracted attention and support from many high-profile downstate politicians, particularly New York City Mayor Bill de Blasio and Gov. Andrew Cuomo, but so far the dramatically enlarged Charter Communications, which acquired Time Warner Cable in 2016, seems comfortable waiting out the union and hoping to force workers to give up and accept to the cable company’s less generous basic benefits package.

The cost of the strike has hurt average middle class Spectrum employees far more than Charter’s top executives — particularly CEO Thomas Rutledge, who had no objections to accepting a take-home bonus and pay package worth $98 million after overseeing the company’s merger. In contrast, many striking workers have depleted their family’s savings and have sold their homes to relocate to less expensive apartments as they struggle to holdout against the nation’s second largest cable company. A few others were reportedly homeless. The union’s emergency fund has been depleted.

The David vs. Goliath battle has also put enormous strain on some affected families. Some have quit the company and looked for employment elsewhere, some others have returned to work and abandoned the strike, leaving holdouts hoping for a breakthrough.

Instead, Charter appears to have won a mysterious ally in the form of a Spectrum employee hired after the strike began in 2017. Initially the worker  had a supervisory role in the company with a salary to match, but late last year strangely accepted an apparent demotion to a level three technician, while retaining his very generous managerial salary. That worker, on his own, managed to navigate a complicated procedure and cumbersome process to file a petition to decertify the union with the National Labor Relations Board. If his effort is successful, IBEW Local 3 would lose the right to negotiate for their members, which is another way of saying “break the union.”

“The guy was brought in – he’s a front, pretty much,” Staten Island mom Sanela Djencic told LaborPress. “He was brought in to bust the union.”

Not so, claims Charter.

“Charter had no involvement in the filing of the decertification petition,” Charter/Spectrum spokesperson John Bonomo flatly told LaborPress in an email. “We don’t have any further comment.”

The NLRB ruled the employee’s petition to decertify the union was valid, finding insufficient evidence to prove the worker was actually serving in a managerial capacity at the time.

In a June 27 letter to employees, John Quigley, Charter’s regional vice president of New York City field operations, was considerably less neutral about the union’s involvement in Charter’s business.

“This ruling clears another hurdle in the decertification process that will allow employees to determine their future,” Quigley wrote. “It is a common tactic for unions to delay and/or block decertification efforts as long as possible […] instead of allowing the voice of employees to be heard. We believe that employees should have the right to vote in a secret ballot election to determine their future. It is the fair and right thing to do.”

Quigley

Quigley did not comment on Charter’s own role erecting hurdles to settle the strike action, something that would also allow employees to determine their future. In fact, strikers complain companies like Charter often prefer to stall and block a fair settlement in hopes the union and its members will run out of funds before it is forced to the table to sign a new agreement.

The company’s efforts to reject union demands come at the same time it is under pressure to deliver the merger-related cost savings it promised shareholders and Wall Street as an outcome of the multibillion dollar merger deal. Cutting back on employee benefits is one way to manage that. Bringing in independent contractors, traditionally paid less and offered fewer benefits, is another. But Charter has consistently claimed it is not trying to hurt its workforce.

Scabby the Rat

“Charter did not want this strike and made multiple attempts to resolve it,” a company spokesman said. “But the union has not been a true partner in negotiations. With Local 3 refusing to even discuss the terms in Charter’s offer, we moved forward last summer and implemented wage increases and other worker benefits. Today we are putting more money into our employees’ pockets, providing them with excellent benefits, and making substantial investments to shore up their retirement benefits that are in jeopardy.”

Charter’s declarations of what is ‘fair and right’ have irritated some members of New York City government.

“Charter Communications has betrayed the public trust and is not deserving of the right to do business with our City,” said Councilman I. Daneek Miller (D-St. Albans). “Charter has an established pattern of deceit against its own workers and consumers in the name of boosting its profit margin, and it must be held accountable for its deception. Well-paying middle class jobs, healthcare and the generational security that is best achieved through union membership are core principles of our city, for which the company has demonstrated no appreciation. If Charter continues to engage in bad faith negotiations with Local 3 or sponsors any attempts to break the union, it’ll be hard pressed to persuade the council to renew its franchise agreement.”

In June, Councilman Rory Lancman (D-Hillcrest) told The Tribune, “Charter Communications has spent the past 15 months doing everything in its power to break Local 3 and boost its own bottom line. Charter’s complete disregard for its own workers and unwillingness to negotiate in good faith are beyond shameful and will not be tolerated in New York City.”

New York’s Public Service Commission is drafting additional fines and sanctions on Charter Communications, as well as possibly stripping the company’s ability to continue providing cable service in New York State.

PSC Chair John Rhodes on Friday accused Charter, which offers service under the Spectrum brand, of “gaslighting its own customers,” with false claims it exceeded its obligations to New York State, while actually shortchanging customers and dragging its feet on promised service expansion.

“Not only has the company failed to meet its obligations to build out its cable system as required, it continues to make patently false and misleading claims to consumers that it has met those obligations without in any way acknowledging the findings of the Public Service Commission to the contrary,” said Chair Rhodes. “Our patience with Charter has come to an end and now we must move to take much stronger actions.”

The PSC is currently developing a number of enforcement actions, including additional penalties/fines, injunctive relief, sanctions, and/or revocation of Spectrum’s ability to continue offering cable service in New York State.

Rhodes’ complaints largely focus on Charter’s ongoing failure to commit to the State’s 2016 Merger Order which approved Charter’s acquisition of Time Warner Cable as long as Charter completed service improvements, rural broadband expansion, and reduced customer complaints. Rhodes is particularly upset that Charter has failed to meet its rural broadband obligations on a timely basis, leaving many of the 145,000 unserved and underserved homes and businesses promised Spectrum internet service waiting through lengthy delays.

That may come as a surprise to many Spectrum subscribers in New York, who have seen saturation advertising for several months from Charter promoting its statewide rural broadband expansion program and the company’s claims it is ahead of schedule.

The PSC previously ordered Charter to cease “its misleading campaign” and has referred the matter to the New York Attorney General’s office for possible civil action. As of this week, the advertisements continue to air.

Charter has denied the allegations made by the state’s regulators and notified the PSC it intends to seek judicial review and/or bring legal action against the state.

Whatever pleasantries were exchanged between Charter Communications and the New York Department of Public Service (Public Service Commission) earlier this year are now gone as the relationship between the cable company and state officials continues to deteriorate.

The first shot across the bow this summer came in Charter’s June 28th letter in response to a demand by the state to unconditionally accept the state’s terms of its 2016 Merger Order granting the acquisition of Time Warner Cable by Charter Communications. Except the cable company did not actually agree unconditionally to those terms. As part of a dispute over Charter’s fulfillment of its responsibilities in the Merger Order regarding rural broadband expansion, one section seemed to predict future litigation:

“While Charter’s acceptance of these commitments is unconditional, this acceptance remains subject to applicable law. Charter does not waive its positions as to the meaning or proper interpretation of its commitments (including Charter’s position that the negotiating history of Appendix A must guide such interpretation), or any of its legal rights including its right to seek review of the Commission’s June 14, 2018 Orders and the Commission’s interpretation and application of the January 8, 2016 Order.”

On July 3rd, Charter’s attorneys sent another letter to the telecommunications regulator doubling down on this language:

“Charter fundamentally disagrees that the Commission’s June 14th Order accurately reflects the agreement that was reached with Charter with respect to the Merger Order. The company intends to appeal the Order….”

That notification was included in a letter requesting an extension of the deadline to file a revised rural buildout plan to replace disqualified addresses with other New York addresses where broadband service is not currently available. Charter warned it would pursue “administrative and legal appeals” and did not want to take the time update its buildout lists until those challenges (and appeals) are exhausted. The company’s lawyers made sure to reserve all of Charter’s rights in an even lengthier footnoted disclaimer:

“Certain subjects discussed in this filing pertain to non jurisdictional products and services. Discussion of nonjurisdictional products and services is not intended as a waiver or concession of the Commission’s jurisdiction beyond the scope of Charter’s regulated telecommunications and cable video services. Charter respectfully reserves all rights relating to the inclusion of or reference to such information, including without limitation Charter’s legal and equitable rights relating to jurisdiction, compliance, filing, disclosure, relevancy, due process, review, and appeal. The inclusion of or reference to non jurisdictional information or to the ordering clauses or other requirements of the Order as obligations or commitments to provide non jurisdictional services shall not be construed as a waiver of any rights or objections otherwise available to Charter in this or any other proceeding, and may not be deemed an admission of relevancy, materiality, or admissibility generally. The requests discussed herein should not be construed in any way as a waiver by Charter of any of its legal rights, including (without limitation) Charter’s right to seek review of the June 14th Order or otherwise seek review of the Commission’s interpretation and application of its January 8, 2016 Merger Order.”

The key takeaway from this legal word salad is “non jurisdictional products and services” — code language from Charter to the state suggesting New York regulators have no legal authority to stand on imposing rules, regulations, and requirements on deregulated services like broadband. Charter’s lawyers defended the company against accusations it failed to meet the agreed-on schedule for rural broadband buildout to 145,000 unserved/underserved New Yorkers using similar language. Charter only began suggesting the state’s broadband expansion plan violated federal law after the state declared the company was out of compliance and fined.

Any legal action by Charter will likely rest on claims the federal government deregulated much of the cable business, including broadband service. Therefore, the state lacks enforcement power to compel Charter to offer broadband service to any unserved area, much less on a timetable. Remember, however, Charter was only too happy to agree to the terms of the merger agreement, with all its terms and conditions, to get the merger finished, without any complaints. Now it seems to have second thoughts.

“Charter finds that the task of revising the detailed Buildout Plan and the other requirements is far too large an undertaking to be accomplished with the necessary care and diligence required within the 21-day timeframe mandated in the Commission’s June 14th Order,” the cable company’s lawyers wrote, asking for an extension of the deadline.

Today, the Department issued a terse response to Charter’s legal team, authored by Kathleen Burgess, secretary of the Public Service Commission:

“Your request for a stay of the revisions of Charter’s Buildout Plan and the other provisions required by the Commission’s Order is not a matter for the Secretary. Your request for a 60-day extension is excessive and not adequately justified. Therefore, your request for an extension is denied.”

Two things seem clear: New York will continue to fine Charter for further missed deadlines, and it seems likely this matter is headed for court.

Charter Communications will close down Time Warner Cable’s Wi-Fi calling app Phone2Go on July 5, 2018, citing low customer usage.

Originally introduced in 2014, Phone2Go was marketed as a free Wi-Fi calling app alternative to Skype or Vonage. The Android and iOS app linked to Time Warner Cable/Spectrum’s phone service, allowing customers to make free calls, text and video conference over the app when away from home or abroad. Each account supported up to five devices, which allowed distant relatives, friends, or family members to make and receive free calls.

“One of the important advantages of Phone2Go is you can give an ID to a relative or friend who lives abroad. And they can make calls as if they were in the United States. So they can call you say on your cellphone, they may be say in Europe and you are in the U.S. and they would only pay the local rate,” said Time Warner Cable Phone general manager Jeff Lindsay back in 2016.

The app was never popular with customers, however, because call quality was often poor and the app was infrequently updated. It was also cumbersome to change or add devices, and once registered to a device, it was very difficult to re-register those devices for use with another account. After Charter Communications acquired Time Warner Cable, there were frequent and long-lasting service outages affecting the Phone2Go app, which may have driven off what loyal users it had.

Spectrum is contacting customers registered for the app by phone to alert them the Phone2Go service would be discontinued on Thursday.

Two weeks ago, New York State’s telecommunications regulator gave Charter Communications 14 days to fully and unconditionally agree to the terms and condition of the 2016 Merger Order that granted the cable company permission to acquire Time Warner Cable. On the last day, hours before the deadline expired, Charter agreed, sort of.

“This replacement letter hereby clarifies that Charter ‘unconditionally accept[s] and agree[s] to comply with the commitments set forth in the body of [the Merger Order] and Appendix A’ as set forth in Ordering Clause 1 of the Merger Order,” wrote Adam E. Falk, senior vice president for state government affairs at Charter Communications.

Unwilling to stop there, Falk decided to make the unconditional acceptance… conditional.

“While Charter’s acceptance of these commitments is unconditional, this acceptance remains subject to applicable law,” Falk wrote. “Charter does not waive its positions as to the meaning or proper interpretation of its commitments (including Charter’s position that the negotiating history of Appendix A must guide such interpretation), or any of its legal rights including its right to seek review of the Commission’s June 14, 2018 Orders and the Commission’s interpretation and application of the January 8, 2016 Order.”

That final paragraph signals the Public Service Commission/Department of Public Service that Charter intends to continue insisting that the language in Appendix A governs, defines, and characterizes the entire Merger Order — an argument the Commission had refused to accept because it gave a foundation for Charter officials to claim they were in full compliance with their commitment to roll out service to an additional 145,000 unserved New York residents. Appendix A omits the purpose and intent of the expansion commitment, explained elsewhere in the Merger Order as providing broadband service in New York’s unserved rural areas. Charter had attempted to count as “new passings” any new expansion of its cable lines, including those in wealthy gated communities and upscale condos, refurbished apartments in New York City, and new housing developments — all likely to receive service without the Merger Order.