Charter Communications has made additional commitments to secure approval from the State of New York for its planned US$56bn merger with Time Warner Cable. The US cableco has promised to boost broadband speeds, extend access to unserved areas and invest in customer service in the state in order to get the deal, which still needs clearance from federal regulators, over the line.
US cableco Charter Communications (NASDAQ:CHTR) has made additional commitments to secure approval from the State of New York for its planned US$56bn merger with Time Warner Cable (NYSE:TEC).
Charter CEO Tom Rutledge described the New York State Public Service Commission (NYSPSC) approval as “a significant step” for the envisaged merged entity, New Charter, which would also include Bright House Networks, and its customers.
“We thank Governor [Andrew] Cuomo and his team for their leadership and we look forward to bringing many benefits including a superior high-speed, low-cost broadband service to families and seniors in New York,” he said.
The additional commitments include providing broadband speeds of bgetween 60 Mbps and 300 Mbps throughout the state, extending its networks to unserved residential and commercial areas within its footprint, and investing in customer service, Connecticut-based Charter said.
Cuomo said in its his own statement that the merger would “dramatically improve” broadband availability for millions of New Yorkers and lead to about US$1.1bn in direct investments and consumer benefits.
He noted that the additional commitments will see New Charter deliver broadband speeds of at least 100 Mbps statewide by the end of 2018 and 300 Mbps by the end of 2019. New York City based-TWC currently provides speeds of up to 50 Mbps for customers outside the city.
New Charter will also be required to extend high-speed broadband services to 145,000 unserved customers, he added.
The NYSPSC has also issued a US$500m solicitation for private sector partners to join the New NY Broadband Program, designed to expand high-speed internet services, particularly in unserved and underserved areas.
Applications to participate in the public-private partnership must be submitted to the New York State Consolidated Funding Application Portal by 15 April. Additional funding rounds will be announced throughout 2016.
John Malone-backed Charter agreed to buy TWC and Bright House for US$56bn and US$10.4bn respectively in May 2015. The deal, which would create the country’s second largest cableco behind Comcast, still needs clearance from federal regulators as well as authorities in California and New Jersey.
Bernstein Research analyst Pal de Sa said in a recent note that the regulatory outcome of the proposed transaction should be revealed by Q2 2016. He predicts that it will be approved but said a rejection is not out of the question if, for example, there is sufficient evidence of anti-competitive intent toward OTT video providers or regulators decide New Charter will have too much “gatekeeper power”.
De Sa noted that the deal would prove negative for telcos as it would boost cable’s ability to compete for retail and enterprise customers and wireless traffic.
Charter completed its financing for the acquisitions last November with a US$2.5bn note offering.