Charter sued by New York State for slow internet speeds

Last month, New York Attorney General Eric Schneiderman filed an 82-page lawsuit against Charter (formerly Time Warner Cable) for willfully defrauding hundreds of thousands of New Yorkers in a pattern of “repeated and persistent illegality.” According to the lawsuit, Charter falsely promised speeds that it knew it could not deliver and falsely promised reliable access to content that it chose not to deliver.

From 2012 until 2017, the lawsuit says, Charter let customers sign up for internet packages promising certain speeds, while renting them modems which Charter knew were not “capable of supporting the service levels paid for.” In fact, “[Charter]’s former head of corporate strategy admitted in a February 2015 email that, ‘the effective speeds we are delivering customers in a 20 Mbps tier when they have a D2.0 modem is meaningfully below 20 Mbps.'”[1] The vast majority of the victims were leased deficient equipment for at least three consecutive months.

Not only were the modems Charter rented to customers not capable of supporting the speeds the customers were paying for, in many cases, but Charter also slowed their customers’ internet speeds on purpose. The lawsuit alleges that Charter deliberately “programmed [customers’] D2.0 modems to cap their speeds at 20 Mbps, but continued to charge them for higher speed plans.”

The purpose of Charter’s lies about the speed and reliability of its internet service was to enrich itself at the expense of consumers. “Studies conducted by [Charter] show that users place a premium on Internet speed and service reliability, and are willing to pay for such attributes because they directly affect the Internet experience.” Thus, Charter allegedly differentiated pricing tiers exclusively on the basis of speed. For instance, Charter charged a list price of $109.99 (plus $10 monthly modem fee) for 300 Mbps internet, compared to a list price of $49.99 (plus $10 monthly modem fee) for 10 Mbps internet. An ad for the 300 Mbps “Ultimate Internet” plan trumpeted “a new dimension of reliability and a revolution in velocity for today’s online life.”

Nothing could have been further from the truth. For instance, Internet Health Tests conducted from August 2015 to January 2016 showed that Charter was not even coming close to its promised speeds. “The average subscriber on the 100 Mbps plan received 24% of the promised speed, the average subscriber on the 200 Mbps plan received 15% of the promised speed and the average subscriber on the 300 Mbps plan received 11% of the promised speed.”

The New York Attorney General has been investigating internet service providers since at least 2015, when he asked Verizon, Time Warner Cable (now Charter), and Cablevision to provide data on on their internet speeds. With the advent of video streaming services and cloud-based software, it is more than ever to make sure internet service providers are delivering the speeds they promise. Just last month, an ad industry self-regulatory body told Comcast to stop making misleading claims that it has the “fastest internet in America.”

The New York Attorney General is continuing to solicit the public to submit data about their broadband speeds at home, so they can investigate if other companies aren’t delivering on their internet speed promises. You can test your internet speed and submit the results on their website.

[1] DOCSIS, abbreviated “D,” is a standard for high-speed cable modems. D2.0 was released in 2001. The newest version is D3.1.

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