Teke Wiggin
An October New York City rally in support of workers striking against Charter Communications. Well-attended by unions and community groups, the event received virtually no media coverage.
Both New York City Mayor Bill de Blasio and New York Governor Andrew Cuomo have threatened to send cable giant Charter Communications packing, siding with more than 1,700 workers who have waged one of the longest strikes in recent memory.
Yet Charter, which owns Time Warner Cable and provides cable TV and Internet service under the name Spectrum, has failed to reach a deal with its employees, who staged a walkout nine months ago.
“The strike has gone on far too long,” de Blasio said in a statement to The Progressive. “It’s time for Charter to come to the table with a fair deal and prove to New Yorkers they’re worthy of their business.”
The conflict underlines the immense power that telecommunications companies have gained over decades of deregulation, and is testing the limits of local government’s ability to help workers on the picket line. It also may serve as a harbinger of even tougher times to come for the labor movement, with the Trump administration potentially emboldening businesses to launch new attacks on unions, even in labor strongholds like New York City.
The conflict underlines the immense power that telecommunications companies have gained over decades of deregulation, and is testing the limits of local government’s ability to help workers on the picket line.
“There’s no question that the current political environment in Washington is factoring into the equation here,” said Chris Rhomberg, a sociology professor at Fordham University, about the conflict. Actions by the Trump administration, such the president’s new appointments to the National Labor Relations Board, “send a signal to corporations that this administration is not going to work as hard to protect workers’ rights.”
Due to its 2016 acquisition of Time Warner Cable, Charter Communications effectively operates as a monopoly in some areas of New York State, including swaths of New York City, industry experts say. It employs roughly 92,000 people—only about 2,500 of whom are unionized—and scooped up $3.52 billion in profits last year.
On March 28, more than 1,700 members of New York City Local 3 of the International Brotherhood of Electrical Workers staged a walkout after Charter allegedly tried to slash their benefits by replacing the union’s health insurance and pension plan with Charter’s standard plans.
Charter says it’s offering an average wage increase of 22 percent, but the union claims the raise would not offset the benefits cuts.
During the conflict, Local 3 members have picketed outside Spectrum offices and staged a number of rallies, where speakers have cast Charter CEO Thomas Rutledge, the highest-paid U.S. CEO in 2016, as a symbol of corporate greed.
Sabotage has caused some outages, but Charter has used replacement subcontractors to continue to provide what it says is quality service. Meanwhile, media coverage of the union’s plight has been sorely lacking, union members say.
“I still run into so many people that don’t even know that there’s a strike going on,” gripes Troy Walcott, a Local 3 shop steward, in an interview with The Progressive.
But Local 3 has enjoyed at least one advantage: government support.
In May, local politicians chastised Charter over its treatment of Local 3 during a four-hour city council hearing, while the city began investigating whether Charter had breached the terms of its local franchise agreement, including provisions stating that Charter would respect collective bargaining and favor in-city vendors.
“[W]e’re giving you the right to do business in the city, and we expect you to extend the rights to the workforce to have a fair negotiated contract,” council member Elizabeth Crowley told Spectrum representatives during the May hearing.
Negative findings from the probe could have a “very real impact” on the company’s “ability to be here and do their work here,” de Blasio said in August.
In November, the mayor requested proposals for ways to expand high-speed Internet access across the city.
“If someone takes that offer up, that creates the competition that might make [Charter] change,” Walcott says.
Governor Cuomo has thrown his weight behind Local 3.
Governor Cuomo has also thrown his weight behind Local 3. In September, he declared at a union rally that if Charter “didn’t get their act together” and live up to its obligations, “they’re going to be out of the state of New York.”
This month, acting on the recommendation of Cuomo’s counsel, the New York Public Service Commission began formally investigating whether Charter had broken promises it made to win state approval of its Time Warner Cable acquisition.
The regulator’s chairman wrote to Charter CEO Rutledge that he was “very concerned” that the labor dispute “is having an adverse impact on New York consumers” and that the PSC would examine Charter’s response to the strike “and actions to preserve service quality during the strike.”
“[Local 3] is now using the political process in NYC and in the state to apply pressure on Charter,” says Jeff Keefe, a former labor relations professor at Rutgers University, in an interview. “The question is will that be enough? And up to this point, it has not been enough.”
Charter’s resistance to government pressure points towards the erosion of telecommunications regulation, experts say.
In the past, state and municipal regulators had broader discretion to cap wireline telephone and cable TV rates, collect commissions or franchise fees, and enforce strict service quality standards, according to Richard Berkley, executive director of the Public Utility Law Project of New York. This meant that companies like Charter “always had to be concerned about what the government was thinking about their role in the community and their delivery of service,” Keefe added.
During a strike against Verizon’s predecessor in 1989, the Communications Workers of America exploited this relationship by mobilizing 100,000 consumers and 130 state legislators to oppose the company’s request for a $360 million rate increase, said Bob Master, vice president for Communications of Workers District One.
"That represented a real threat to the company's bottom line,” he tells The Progressive. “But that was back when the Public Service Commission literally set rates and determined profits, and that regime disappeared nearly 20 years ago."
Federal deregulation that began in the 1990s generally reduced state and local regulators’ rate-setting authority and service standards for wireline phone and cable TV, according to Berkey. Meanwhile, newer technologies that account for a growing share of industry profit, such as Internet and wireless cellular phone services, have enjoyed virtually total freedom from such regulation since a 2005 court ruling, he says. This helps explain why New York City’s franchise agreement with Charter doesn’t stipulate any Internet service quality or speed requirements, and only sets rules for Charter’s cable TV service.
The agreement’s provisions on collective bargaining and vendor use could be difficult to enforce due to arguable preemption by federal labor law, Berkley added. The state government has more immediate leverage over Charter, but perhaps not enough to sway the company.
Before launching its investigation of Charter’s performance during the strike, the New York Public Service commission had already fined Charter $1 million—with the possibility of up to $12 million more in penalties—for failing to expand its network at the pace it had pledged to secure state approval of its Time Warner Cable acquisition.
There is a nuclear option.
And New York’s state attorney general sued Charter shortly before the strike on the alleged grounds that Time Warner Cable, prior to its acquisition by Charter, defrauded consumers. But Berkley says potential financial penalties, on their own, are unlikely to prompt a company worth more than $80 billion to settle a labor dispute.
But there is a nuclear option.
Upon the expiration of a franchise agreement, the city or state government could order Charter to remove or sell its network, Berkley says. But local competitors to the company are few, and arranging a switch could mean mass disruption for consumers and small businesses.
Charter’s contract with New York City is up for renewal in 2020.
“If [New York City politicians] all believe, as they say, that Charter-Spectrum is not acting in the best interests of this city,” Local 3’s Walcott says, “then they will not renew [the] franchise agreement.”
Teke Wiggin is a freelance Brooklyn-based reporter who covers labor, technology and housing. Follow him at @tkwiggin.