Cablevision Purchase OK'd By State PSC

The sale of Cablevision Systems Corporation has been approved by the state Public Service Commission Wednesday.

Purchaser Altice N.V., a multinational cable television company, is being required to provide $243 billion in benefits to New York consumers.

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As part of the purchase agreement, Altice will triple the speed of its network to 300 Mbps by the end of 2017, create a new low-income broadband program, build out its network in unserved areas and provide $40 million of additional benefits associate with Cablevision’s participation in a federal broadband affordability program.

“With our decision today, we will see a significant investment in new York’s communication landscape that improves quality, reliability, speed and affordability for Cablevision’s customers,” she said.

Altice will also be purchasing other Cablevision assets, according to fortune.com, including News 12 networks, Newsday and other publications.

Madison Square Garden and other media and sports assets are not a part of the deal, fortune.com said.

Highlights from the decision:

• Affordable High-Speed Broadband for Low-Income Customers [$215 million value]: The Commission will require Altice to create a new low-income broadband program with speeds of 30 Mbps at $14.99 per month to serve low-income households receiving certain federal income assistance, estimated to be 600,000 households in the franchise area. The Commission will also require Cablevision to participate in the Federal Communication Commission’s new modernized Lifeline program to further enhance broadband affordability, which the Commission estimates will produce in excess of $40 million in affordability benefits.

• Increasing Internet speed to 300 Mbps [$20 million value]: The Commission will require Altice to upgrade its system to deliver at least 300 Mbps by the end of 2017, tripling the current maximum speed of 101 Mbps. A faster broadband service is essential to meet evolving consumer demands and to keep the region economically competitive.

• Stand-Alone Low-Cost Internet [$4 million value]: The Commission will require Altice to double the speed of its current, stand-alone low-cost internet package from 5 Mbps to 10 Mbps and continue to offer it, with a free digital antenna for over the air channels and free access to Wi-Fi hotspots at the current price of $24.95 to new customers for two years and to existing users of the product for three years.    

• Network Build-Out [$3 million value]: Although Cablevision’s service territory is largely built out to all customers within its franchise areas, the Commission will require Altice to complete the build out in the Town of Milan in Dutchess County. The Commission will also require Altice to bid for funding to build out the Barrier Islands and to create a $2 million fund to cover some line extension costs for any remaining unserved or underserved homes or businesses in its service area.   

• Resiliency [$1 million value]: The Commission will require Altice during declared State and federal emergencies, to provide free Wi-Fi service to all, free access to news content, and to coordinate their restoration efforts with electric utilities. The Commission will also require Altice to submit a resiliency plan designed to improve its emergency response and readiness planning, outage reporting, pre-storm emergency communications and network planning to be shared, upon completion, with local governments. Finally, Altice, will be required to modernize its network by deploying fiber deeper into its network and streamlining its architecture in an equitable and non-discriminatory manner. This will make the entire network more robust, reliable and resilient.

• Job Protection for Customer-Facing Employees: For four years, Altice is prohibited from laying off, involuntarily reducing, or taking any action that is intended to reduce (excepting attrition and retirement incentives) any customer facing jobs (e.g., call centers or walk-in centers) in New York. In addition, the company is required to maintain, for two years, at least 14 walk-in centers in its New York footprint. Any closures or consolidations of walk-in centers may not cause any layoffs, involuntary reductions in workforce or have that effect.

• Service Quality Protections: The Commission will require Altice to ensure that service quality will remain consistent with current levels of service quality, as measured by repair calls per customer, and repair completion rate. The company will be required to report quarterly to the Department and will make investments of up to $16 million per year in service quality improvements if service metric standards are not met. Such investments will be made by the parent company if Cablevision’s debt leverage is above a certain ratio.

• Free Broadband Connections and Service: The Commission will require Altice to provide free broadband connections and ongoing service to 40 anchor institutions in unserved or underserved areas.

• Training Internships and Scholarships: The Commission will require Altice to establish training, internships and scholarships for science, technology, engineering and math students.

• Most Favored State: In order to ensure that New Yorkers gain the benefits of any other commitments, the Commission will require Altice to agree to a most favored state clause. If, in obtaining approval of the proposed transaction in other jurisdictions, Altice commits to more line extensions, faster broadband speeds, or standalone broadband pricing that is lower for the same or similar value than that offered in New York, or additional low-income eligibility, or any other public benefit, they should, within 30 days following such commitment, notify the Commission of its intent to provide those same benefits in New York at terms that are reasonably comparable to the other local, state or federal commitments.