Altice to pay $72M for inadequate response to Isaias, state officials say

New York has reached a nearly $72 million settlement with Altice USA over what the state called the company's failure to adequately prepare for and respond to last year’s Tropical Storm Isaias, which knocked out broadband and cable television service for more than 400,000 customers, Gov. Andrew M. Cuomo said Thursday.

The accord, approved Thursday by the Public Service Commission, includes $3.4 million in credits to New York customers whose Altice service was affected by the storm. The credits have already been applied to affected customers' bills, according to Altice.

The settlement also requires Altice to spend more than $68.5 million to make its systems more resistant to damage caused by storms, and improve its response to future storms, without billing customers for the improvements.

"It is beyond unacceptable to leave hundreds of thousands of customers without the ability to access the Internet, especially during a time when so many people rely on broadband for work and school," Cuomo said in a statement.

In a statement, a company spokeswoman said Altice USA has been working with the Public Service Commission since the storm "to jointly examine opportunities for enhancements in how we communicate and engage with our customers, communities, and public officials during severe weather events."

The required upgrades include new, modern outage communication and notification platforms, call center technology and the hiring of storm recovery and post-storm remediation coordinators and technicians. The company also must improve communication and coordination with municipal and county governments, state officials said.

The changes must be made within two years.

One former Altice customer, Robert Knutson, 68, of Huntington, said the loss of service disrupted his business and the functioning of his heart monitor after the storm. Knutson, who runs a financial services firm, said he had to switch to Verizon.

"The internet is the oxygen of business, and when you take away the oxygen of an entity ... you destroy it," he said. "The public are prey to these utilities."

The $72 million settlement is the largest the state has reached with any company under Public Service Commission jurisdiction for failing to follow procedures related to an emergency response, state officials said.

Tropical Storm Isaias struck Long Island, New York City and the mid-Hudson Valley on Aug. 4. The storm’s strong winds and heavy rain damaged electric distribution and telecommunication infrastructure that caused lengthy outages for many New York utility customers, including more than 400,000 Altice customers who lost service for as long as two weeks.

An investigation by the Department of Public Service and the state Department of Financial Services found Altice "failed to adhere to many significant aspects of its response plan and associated severe weather preparedness plan, which contributed to Altice's inability to timely restore service and effectively communicate to customers experiencing outages," as well as with government officials and electric utilities, state officials said in a statement.

The investigation also showed the need for major telephone and cable television companies to file annual updates on their emergency contingency plans, similar to those required of electric utilities, state officials said.

By Maura McDermott

maura.mcdermott@newsday.commauramcdermott

Maura McDermott covers health care and other business news on Long Island.