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Cuomo’s Cable Company War Could Enrich His Campaign Donors

Last week New York Governor Andrew Cuomo’s Public Service Commission revoked the authorization of the state’s largest cable TV provider to operate. The action could enrich other cable industry giants that, together, rank among Cuomo’s largest campaign donors.

David Sirota

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Andrew Cuomo photo by Diana Robinson.

When New York Governor Andrew Cuomo’s administration recently moved to shut down New York City’s largest cable television provider, Cuomo cast the maneuver as an initiative to defend consumers from a company he claimed had failed to build out service to rural customers. He did not mention that the action could end up enriching other cable industry giants that are together among Cuomo’s largest campaign donors — and that have delivered large contributions to Cuomo’s campaign in the year leading up to the decision.

Cuomo, a Democrat, is facing a primary battle against progressive actress Cynthia Nixon, who has accused him of shaping policy to benefit his largest campaign contributors.

In the current battle over New York’s telecommunication regulation, Cuomo’s Public Service Commission (PSC) last week revoked Charter Spectrum’s authorization to operate in the state. The commission’s order said the company — which is the largest cable provider in New York — had failed to build out high-speed Internet service to rural areas, as required in its 2016 merger agreement with Time Warner. Cuomo declared that the company “has been executing fraud on the people of this state.”

Cuomo aired his criticism after a reporter from a Charter-owned news outlet had asked him about corruption scandals engulfing his administration. Later, Nixon asserted that the governor was employing a Donald Trump-esque tactic to try to intimidate journalists. Whether that was in fact Cuomo’s motive, there is little doubt that his administration’s move could also open up a rare — and highly lucrative — expansion opportunity for well-positioned telecom industry competitors such as Comcast or Altice, which have delivered big money to Cuomo.

Campaign finance records reviewed by Capital & Main show that Comcast and Cablevision — the latter of which is owned by Altice and operates in New York — have together given Cuomo more than $830,000 during his career as New York attorney general and then governor – a sum that dwarfs the $191,000 that Charter subsidiary Time Warner gave to Cuomo in the same time period. Nearly $200,000 of the cash from Comcast and Cablevision was delivered to Cuomo in the last year – while Time Warner made no contributions to the governor in that period.

Meanwhile, a Cuomo aide was recently hired by a lobbying firm that represents Altice, and Cuomo’s PSC in 2015 approved the company’s merger with Cablevision over the objections of the Communications Workers of America, which argued to the Federal Communications Commission that the deal would “starve Cablevision of resources needed for service, network investment and jobs.”

Altice and Comcast did not comment in response to questions from Capital & Main. A statement from Richard Azzopardi, a spokesman for Governor Cuomo, read in part:

“If your theory were correct and anyone was influenced by contributions, Charter would not have been granted the franchise in the first place‎. Rather than serve the people of New York, for the past two years Charter has sought to advance its own interests at their expense. In addition to its failure to expand broadband service to rural, poor, and underserved communities that is at the heart of the PSC’s action, Charter misled New Yorkers through advertisements on its stations that they took down only yesterday.  At every turn they have put their own interest first, rather than keep the promises to New Yorkers they made in exchange for their exclusivity and the PSC rightly exercised its authority as a regulator.”

Potential Charter replacements like Altice “would arguably be very happy to expand their footprint in New York,” said Harold Feld, vice president of the consumer group Public Knowledge.

Altice reportedly has about three million customers in New York — and has in recent years been aiming to expand its Internet service in New York City. Comcast does not operate in New York, but does operate in neighboring New Jersey and Pennsylvania.

“For them, this would be an opportunity that is adjacent to their existing operations,” Feld told Capital & Main. “There are just so few opportunities to add a significant expansion of cable systems, and this one in particular includes New York City, which is a very significant and profitable market.”

The PSC’s order revolves around conditions Charter agreed to as part of its merger with Time-Warner. According to PSC documents, that deal required Charter to expand broadband service to “an additional 145,000 homes and businesses in less densely populated areas across the state” — an obligation that Cuomo administration officials say the company did not follow through on.

For its part, Charter denies the allegations.

“We believe we’re in compliance with the plain reading and the buildout requirements that the state imposed on us in merger conditions, and we have a very strong legal case and ability to defend ourselves,” Charter CEO Thomas Rutledge said this week during an earnings call. “And it could play out over a lengthy period of time if required.”


Copyright Capital & Main

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