Charter Pays Record $174 Million Settlement over Misleading Internet Speeds

The Associated Press
The Associated Press

Charter Communications agreed to a record $174.2 million settlement with New York state on Tuesday in which the state claimed that the company defrauded consumers by delivering slower than average Internet speeds.

Former New York New York Attorney General (AG) Eric Schneiderman levied the lawsuit against Charter and its subsidiary, Spectrum Management Holdings, in 2017, alleging that the cable company delivered slower than promised Internet speeds.

According to the 2017 lawsuit, consumers experienced data speeds roughly 70 percent slower than advertised and Wifi speeds 80 percent slower than promised.

Charter will give New York consumers $62.5 million in refunds, which amounts to roughly $75 and $150 for each subscriber. Current New York AG Barbara Underwood’s office suggested that the $174.2 million settlement serves as the largest payout to consumers from an Internet service provider (ISP).

The telecom giant will also provide more than $100 million in streaming services and premium channels to 2.2 million customers at no additional charge. Charter will offer all Internet and cable subscribers either three free months of HBO or six free months of Showtime as part of the settlement.

“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 on Tuesday.

Underwood continued:

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.

Charter contended in a statement on Tuesday that its predecessor company, Time Warner Cable, made the actions related to the lawsuit and that it made several improvements to its New York Internet service since closing its purchase of Time Warner in 2016. Charter said that they increased its minimum data speeds to 100 megabits per second, now offer one-gigabit service throughout the state, and offer a low-cost broadband option to New York consumers.

Charter said on Tuesday:

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.

Charter will notify subscribers of their eligibility for refunds and will disburse them within 120 days.


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