Charter Communications has agreed to a $174.2 million settlement with New York state in connection with a suit that alleged the cable company defrauded consumers by delivering slower than advertised internet speeds.
The suit, filed in 2017, dated back to Charter’s predecessor in New York -- Time Warner Cable -- and claimed both companies delivered deficient cable modems that could not provide as-advertised internet speeds. In some cases, according to the original suit, customers’ premium data speeds were as much as 70% slower than advertised and WiFi speeds were up to 80% slower than promised.
The New York Daily News first broke the story Tuesday.
The settlement includes $62.5 million in direct refunds to customers, a figure the AG’s office believes is the largest-ever payout to consumers by an internet service provider in U.S. history.
“This settlement should serve as a wakeup call to any company serving New York consumers: fulfill your promises, or pay the price,” said New York Attorney General Barbara Underwood 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.”
News of the settlement comes just days after the New York Public Service Commission extended the deadline for Charter to submit a six-month plan for its exit from the state. The company and the PSC continue to negotiate to keep the cable operator in New York.
In a statement, Charter stressed that the actions were made by its predecessor company -- it purchased Time Warner Cable in 2016 -- and that it has made several enhancements to service in New York since closing that deal, including increasing minimum data speeds to 100 Mbps, offering 1-Gigabit service throughout the state as well as a low-cost broadband offering -- Internet Assist - to lower income consumers in the state.
“We are pleased to have reached a settlement with the Attorney General on the issue of certain Time Warner Cable advertising practices in New York prior to our merger, and to have put this litigation behind us. Charter has made, and continues to make, substantial investments enhancing internet service across the state of New York since our 2016 merger, as acknowledged by the Attorney General in this settlement. We look forward to continue providing the best TV, Internet, Voice and Mobile products to our customers, and to bringing broadband to more homes and businesses across the state.”
According to the most recent settlement, about 700,000 active Charter subscribers in New York will each receive refunds of between $75 and $150 each. About 2.2 million active customers will receive streaming services and premium channels, valued at about $100 million, at no charge.
Charter will notify subscribers of their eligibility for refunds and disburse them within 120 days.
Additionally, under the settlement, Charter is required to implement a series of marketing and business reforms, including the requirement to describe internet speeds as “wired” and to substantiate them through regular speed testing.