Cable operator Charter has agreed to pay a record USD 174.2 million in order to settle a consumer fraud case in New York. Of the total, USD 62.5 million will go directly to customers as refunds. The Attorney General of New York believes the amount represents the largest-ever payout to consumers by an ISP in US history. This is the first settlement to result from the Attorney General’s investigation of broadband service in New York. Charter earlier operated as Time Warner Cable and then as Charter brand Spectrum.
The agreement settles a consumer fraud action that alleged Charter, NY state’s largest ISP, denied customers the reliable and fast internet service it promised. The USD 62.5 million will go back to over 700,000 active subscribers, who will each receive USD 75-150, plus streaming services and premium channels with a retail value of over USD 100 million, at no charge for 2.2 million customers. Specifically, customers will get compensation for having leased inadequate modems and Wi-Fi routers, and for getting slower speeds.
Under the terms of the settlement, Charter will also implement marketing and business reforms, including the requirement to describe internet speeds as ‘wired’ and to back numbers with regular speed testing. Charter has also made “substantial” network enhancements to improve its internet service in New York.
The Attorney General launched a lawsuit against Charter in early 2017, saying the company failed to deliver promised broadband speeds. The Attorney General at the time said the company had been making promises since 2012 that it would provide customers with a “fast, reliable connection” to the internet from anywhere in the home, but that it had not done so.
Charter agreed to a settlement worth USD 13 million with New York State in June 2017 over its failure to meet its broadband roll-out targets. Expanding broadband access to underserved areas was one of the commitments given by the cable operator to get approval for its takeover of Time Warner Cable. New York then sued Charter over the violation of the merger terms in May of this year and later revoked its approval for the merger deal.
