N.Y. PSC Issues Order on Charter Communications & Time Warner Cable

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ALBANY, New York, -- The New York State Public Service Commission issued the following order (Case No. 15-M-0388) extending the deadlines and directing further process involving Charter Communications and Time Warner Cable, New York:

CASE 15-M-0388 - Joint Petition of Charter Communications and Time Warner Cable for Approval of a Transfer of Control of Subsidiaries and Franchises, Pro Forma Reorganization, and Certain Financing Arrangements.

ORDER EXTENDING DEADLINES AND DIRECTING FURTHER PROCESS

(Issued and Effective )

INTRODUCTION AND BACKGROUND

On , the Commission issued an Order Denying Petitions for Rehearing and Reconsideration and Revoking Approval (the Revocation Order) and an Order Confirming Missed Compliance Obligation and Denying Good Cause Justification (the Compliance Order).1 The Revocation Order (1) revoked the Commission's approval of Charter Communications, Inc.'s (Charter or Company) acquisition of Time Warner Cable, Inc.'s New York assets and franchise and (2) directed Charter to file, within 60 days, a six-month exit plan (the Six-Month Exit Plan) to effect an orderly transition to one or more successor providers in areas previously served by Time Warner Cable, Inc. in New York. In the accompanying Compliance Order, the Commission determined that Charter failed to satisfy the target for the build out of Charter's network in New York State2 and that Charter had not made a sufficient Good Cause showing for the missed compliance obligation.

On , Charter filed a letter requesting an extension of this 60-day deadline to file a plan with the Secretary, and the 30-day period to file petitions for rehearing of both the Revocation Order and the Compliance Order pursuant to Public Service Law (PSL) *22.3 On , Charter's request to extend the deadline to file the Six-Month Exit Plan was granted to , 2018.4 Also, on , Charter's request for an extension of the 30-day deadline for the filing of rehearing petitions pursuant to PSL *22 was granted to , 2018.5

On , Charter filed a letter requesting an additional 30-day extension of the deadline to file petitions for rehearing of both the Revocation Order and the Compliance Order pursuant to PSL *22.6 The same day, Charter also submitted a request to extend the date for the submission of the Six-Month Exit Plan by 30 days.7 That request was granted on , 2018.8

On , Charter filed a further Request for Extension of Time to File Applications for Rehearing and Extension of the Deadline in Ordering Clause No. 4 of the Order,9 seeking sixty-day extensions of the deadline to file a Six-Month Exit Plan with the Secretary, and the period to file petitions for rehearing of both the Revocation Order and Compliance Order pursuant to PSL *22. That request was granted in limited part on , 2018.10 The Order granted limited, 45-day extensions to the respective deadlines, but directed that in the event a settlement agreement was not reached by that date, any further consideration of extensions would require a joint filing providing good cause justification for why the deadlines should be further extended.

On , Department of Public Service (DPS) Staff and Charter filed a joint letter stating that they had not yet been able to reach a fully executed settlement agreement, but that they had established a framework for the structure of a settlement agreement and that discussions were ongoing. The letter also stated that a further 18-day extension of the deadlines to file a Six-Month Exit Plan with the Secretary and to file petitions for rehearing of both the Revocation Order and Compliance Order pursuant to PSL *22 was therefore warranted.11 This request was granted on , 2018.12 According to that joint letter, such a settlement agreement would necessarily address: issues relating to the inclusion of certain categories of addresses and whether they are valid "passings" under the Merger Approval Order; penalty actions and amounts under dispute in Supreme Court; and a schedule for compliance (including enforcement mechanisms) going forward.

On , Charter and DPS Staff filed a joint letter requesting that the deadline to file a Six-Month Exit Plan with the Secretary be extended until , and the deadline to file petitions for rehearing of both the Revocation Order and Compliance Order pursuant to PSL *22 be extended until , 2019.13 That request was granted on , 2018.14

By letter dated , Charter requested that the Commission grant further 30-day extensions by , 2019.15 By One Commissioner Order issued , a limited 21-day extension was granted.16

A further request for additional extensions was filed on , 2019.17 By One Commissioner Order issued , an additional 30-day extension was granted.18 That Order also set forth the expectation that the parties would reach an agreement within four weeks.

By letter dated , Charter requested an additional 30-day extension so that the parties may continue their negotiations.19 By One Commissioner Order issued an additional 30-day extension was granted. That Order noted that Charter stated that "[c]onsiderable time and resources have been deployed to analyze and consider proposed settlement frameworks, which have required extensive internal review both at Charter and by the Department," and that the parties had exchanged term sheets and reached agreement on many key issues.20

On , Charter requested an additional 14-day extension so that the parties could complete their negotiations.21 A 14-day extension was granted on , 2019.22

On , Charter and the Department filed a proposed Settlement Agreement with the Commission.23 The parties request that the Commission consider the agreement for approval and adoption and that such adoption will resolve disputes related to the July Orders. To facilitate that review the Parties propose an additional extension of the deadlines. For the reasons stated below, this Order extends the deadlines by 90 days in order for the Commission to consider whether to adopt the Settlement Agreement.

LEGAL AUTHORITY Pursuant to PSL *22, "[a]fter an order has been made by the [C]ommission any corporation or person interested therein shall have the right to apply for a rehearing in respect to any matter determined therein, but any such application must be made within thirty days after the service of such order, unless the [C]ommission for good cause shown shall otherwise direct...." By this Order, good cause is found to exist here to extend the rehearing deadline contingent on the specific facts and continued obligations discussed herein.

DISCUSSION AND CONCLUSION

Charter and the Department represent in their joint filing of the proposed Settlement Agreement that the Commission should consider and adopt the agreement in full and that such adoption would resolve all outstanding disputes related to the July Orders and the underlying Network Expansion Condition contained in the Merger Approval Order. The joint cover letter states that adoption of the Proposed Settlement Agreement will allow "the parties to move forward with the critical work of expanding access to broadband, by resolving their disagreements without the need for costly litigation."24 The cover letter goes on to state that the "Agreement does not constitute a finding or admission of any violation by Charter nor does it constitute a penalty or forfeiture under the New York State Public Service Law,"25 and that under the Proposed Settlement Agreement, Charter's network expansion "will be completed by , in accordance with a schedule providing frequent interim milestone requirements, with corresponding reporting and accountability, including processes and procedures to ensure proper oversight, and monitoring of progress by the Department and compliance by Charter."26

Given that a proposed Settlement Agreement has now been filed, as well as Charter's continued obligations to comply with the Public Service Law and regulations, a 90-day extension to the filing dates for a petition for rehearing and the Six-Month Exit Plan is warranted to allow for the Commission to fully consider adoption of the Proposed Settlement Agreement, subject to notice under the State Administrative Procedure Act (SAPA), directed herein.

The legal standard for granting the requested extension to petition for rehearing has been met contingent upon Charter's continuing obligation to comply with the New York State Public Service Law and related regulations and requirements, and therefore the further extension of deadline for the filing of rehearing petitions pursuant to PSL *22 and to further extend the deadline for filing the Six-Month Exit Plan is granted.

It is ordered:

1. The deadline for the filing of rehearing petitions pursuant to Public Service Law *22 in connection with the Commission's Order Denying Petitions for Rehearing and Reconsideration and Revoking Approval and the Commission's Order Confirming Missed Compliance Obligation and Denying Good Cause Justification is further extended by 90 days, i.e., until .

2. The deadline for the filing of the Six-Month Exit Plan is further extended by 90 days, i.e., until .

3. Department of Public Service Staff is directed to prepare a Notice of Proposed Rulemaking pursuant to SAPA *202(1).

4. Today's extension is contingent on, and is granted upon the express condition that, Charter continue to comply with the Public Service Law and regulations.

5. This proceeding is continued.

(SIGNED)

Commissioner

* * *

1. Case 15-M-0388, Charter Communications and Time Warner Cable - Transfer of Control, Order Denying Petitions for Rehearing and Reconsideration and Revoking Approval (issued ) (Revocation Order); Id., Order Confirming Missed Compliance Obligation and Denying Good Cause Justification, (issued ) (Compliance Order). (The Revocation Order and the Compliance Order are referred to collectively herein as the "July Orders.")

2. This build out obligation was established in a Settlement Agreement approved by the Commission in a Order Adopting Revised Build-Out Targets and Additional Terms of a Settlement Agreement.

3. Case 15-M-0388, Request for Extension of Time (filed , 2018).

4. An extension of the 60-day deadline from to was granted by the Secretary to the Commission pursuant to Order Clause 6 of the Revocation Order. See, Case 15-M-0388, Ruling on Extension Request (issued , 2018).

5. Case 15-M-0388, Order Granting Extension (issued , 2018).

6. Case 15-M-0388, Request for Extension of Time (filed , 2018).

7. Case 15-M-0388, Request for Extension of Deadline in Ordering Clause No. 4 of Order (filed , 2018).

8. Case 15-M-0388, Order Granting Requests for Extension (issued ). The and orders were confirmed in two Confirming Orders issued on .

9. Case 15-M-0388, Request for Extension of Time to File Applications for Rehearing and Extension of the Deadline in Ordering Clause No. 4 of the Order (filed , 2018).

10 Case 15-M-0388, Order Granting Requests for Extension (issued ). This Order was confirmed on .

11. Case 15-M-0388, Joint Request for Extension of Time (filed , 2018).

12. Case 15-M-0388, One Commissioner Order Granting Further Request for Extensions (issued ). This Order was confirmed on .

13. Case 15-M-0388, Joint Request for Further Extension (filed , 2018).

14. Case 15-M-0388, One Commissioner Order Granting Additional Request for Extensions (issued ). This Order was confirmed on .

15. Case 15-M-0388, Request for Extension of Time (dated , 2019).

16. Case 15-M-0388, One Commissioner Order Granting Additional Extensions (issued ). This Order was also confirmed on .

17. Case 15-M-0388, Request for Extension of Time (filed , 2019).

18. Case 15-M-0388, One Commissioner Order Granting Additional Extensions (issued ). This Order was confirmed on .

19. Case 15-M-0388, Request for Extension of Time (filed , 2019).

20. Case 15-M-0388, Order Granting Request for Additional Extension of Deadlines (issued ), p. 6.

21 Case 15-M-0388, Request for Extension of Time to File Applications for Rehearing and Extension of Deadline (filed , 2019).

22. Case 15-M-0388, Order Granting Request for Further Extension of Deadlines (issued , 2019).

23. Case 15-M-0388, Joint Cover Letter (filed , 2019).

24. Id., p. 1.

25. Id., p. 2

26. Id., p. 1

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