New York Attorney General Barbara Underwood has announced a $174 million settlement with Charter Communications for defrauding internet subscribers. The AG's office says the $62.5 million in refunds is believed to be the largest payout to consumers by an internet service provider in U.S. history.
The agreement settles a consumer fraud action alleging that the state’s largest internet service provider, which operated initially as Time Warner Cable and later under Charter’s Spectrum brand name, denied customers the reliable and fast internet service it had promised. More than 700,000 active subscribers will receive between $75 and $150 each. The AG’s office says 2.2 million active subscribers will also receive streaming services and premium channels worth more than $100 million, at no charge. Also under the settlement, Charter is required to implement marketing and business reforms, including the requirement to describe internet speeds as “wired” and to test them regularly.
“This settlement should serve as a wakeup call to any company serving New York consumers: fulfill your promises, or pay the price,” Underwood said in a statement. “Not only is this the largest-ever consumer payout by an internet service provider, returning tens of millions of dollars to New Yorkers who were ripped off and providing additional streaming and premium channels as restitution – but it also sets a new standard for how internet providers should fairly market their services.”
The lawsuit is separate from a battle Charter is having with Governor Andrew Cuomo, who has accused the company of going back on its promise to expand broadband internet access upstate as part of the state Public Service Commission approval of the Charter-Time Warner merger. The Commission earlier this year sought to force Charter out of New York by rescinding its approval and forcing Charter to sell its operations to another cable company. Charter and the Commission have been negotiating the matter.
