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PSC on Altice buyout of Cablevision

Monday, September 7, 2015
We are convinced that the direction Altice is taking Cablevision will not serve the public interest.  It has been well established that the $17.7 billion purchase by Altice will more than double Cablevision’s debt to $14.4 billion.  This follows the pattern established in Europe by Altice head Patrick Drahi, a corporate raider who specializes in leveraged buyouts which leave the target company with enormous debts followed by massive cost-cutting.
To finance this acquisition, Altice will take on $8.6 billion in new debt, leaving Cablevision with a total debt of $14.4 billion and requiring them to make $1.2 billion in annual interest payments.  The interest payment plus Altice’s announced $1.2 billion in operational cuts means Cablevision will have $1.7 billion less cash available to spend on network and service.  Following the normal model of corporate raiders – and Altice’s well-established behavior in Europe – expenses will be slashed and service cut back.  Altice claims it can reduce Cablevision’s operating expenses from the current $49 per customer per month to that of its European operations, $14 to $16 per customer per month.
Cutting operations to the bone leads to a loss of jobs, postponement of critical maintenance, lost tax revenues in surrounding communities and massive customer defection.  
The Long Island Federation of Labor has testified before the Commission previously about the need to extend competitive broadband services across Long Island.  Our economic future is so closely tied to the first-rate educational facilities and nationally known research facilities in our region that it makes no sense to turn the clock backward by degrading Cablevision.  
We have been very disappointed about Verizon’s refusal to build out FiOS in communities across New York State, especially on Long Island.  Allowing a foreign operator to siphon the profits, jobs and service out of Cablevision and out of this region compounds the damage these two public utilities are inflicting on populations that are striving to be a part of the 21st Century economy.
The New York State Public Service Commission is working carefully to put forward a new vision for electrical generation, transmission and consumption based on the realities of climate change and, we hope, good jobs and stable communities.  Why should telecommunications be different?  If we allow Cablevision and Verizon to undermine the public trust by greedy, predatory behavior in their industry, we degrade our economic vitality and rob our next generation of the chance to become connected with the world around them.
We urge you to stand up for the Cablevision employees, stand up for Long Island and our communities and reject the Altice deal.