×
You will be redirected back to your article in seconds

Charter Reaches $174 Million Settlement on Internet-Throttling Fraud Suit

Charter Communications agreed to a settlement valued at $174.2 million to resolve a lawsuit alleging the U.S.’s second-biggest cable operator defrauded broadband customers by failing to deliver promised internet speeds.

According to the terms of the settlement with the New York Attorney General’s Office, Charter will pay $62.5 million in direct refunds to 700,000 active broadband subscribers in New York, who will each receive between $75 and $150. In addition, Charter has agreed to offer free streaming services and HBO and Showtime premium channels with a retail value of over $100 million to approximately 2.2 million active subscribers in the state.

The New York Attorney General’s Office said it’s believed to be the biggest-ever payout to consumers by an internet service provider in U.S. history.

“This settlement should serve as a wake-up call to any company serving New York consumers: fulfill your promises, or pay the price,” New York Attorney General Barbara D. Underwood said in announcing the settlement Tuesday.

The agreement settles the NY Attorney General’s 2017 lawsuit, filed in New York State Supreme Court, alleging Charter failed to deliver the internet speed or reliability it had promised subscribers in several respects. The fraud allegations covered services initially operated by Time Warner Cable, which was acquired by Charter in 2016.

According to the complaint, Charter (and Time Warner Cable before it) leased “deficient modems and wireless routers” to subscribers that didn’t deliver the internet speeds they had paid for. The operator also did not maintain enough network capacity to reliably deliver advertised speeds to subscribers, and Charter engaged “in hardball tactics with Netflix and other popular third-party content providers” that resulted in degraded streaming video quality.

In a statement, Charter said: “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.”

Under the settlement, Charter’s Spectrum Internet subscribers in New York will have a choice of either three free months of HBO or six free months of Showtime. All other active Charter internet subscribers will receive a free month of Charter’s Spectrum TV Choice streaming service, which lets customers access broadcast TV stations and a choice of 10 pay-TV networks, along with one free month of Showtime.

In addition, Charter is required to implement a series of “marketing and business reforms,” according to the New York AG, including the requirement to describe internet speeds as “wired” and to “substantiate them through regular speed testing.”

More Digital

  • Google Stadia is a Net Neutrality

    Google Stadia is a Net Neutrality Nightmare

    At the Game Developers Conference (GDC) this year, Google announced that it has taken up the long and ever-lengthening dream of the video game streaming service. Meant to replace the hefty, pricey, altogether confounding experience of buying and using various gaming hardware, Google Stadia will run video games on Google’s own hardware in a server [...]

  • crunchyroll logo

    Crunchyroll Raises Subscription Price to $7.99

    AT&T-owned anime subscription video service Crunchyroll is raising its monthly subscription price from $6.95 to $7.99 a month, it announced in an email to members Friday. It’s the service’s first price increase ever, according to a spokesperson. The new pricing will go into effect on May 1 for new subscribers, while existing members will see [...]

  • StyleHaul

    StyleHaul Shuts Down U.S. Operations, Lays Off About 65 Employees

    The axe is falling on StyleHaul: The fashion, beauty and lifestyle digital media and marketing company owned by RTL Group is shuttering U.S. operations, resulting the layoff of around 65 employees. StyleHaul offices in L.A., with about 55 employees, and in New York City, with around 10 staffers, are closing. RTL said StyleHaul’s U.K. operations, [...]

  • Bandsintown Platform Acquires Hypebot, MusicThinkTank

    Bandsintown Platform Acquires Hypebot, MusicThinkTank

    Bandsintown, a leading platform for letting music fans know about upcoming concerts by their favorite artists, has acquired Hypebot, a news site publishing stories about the music industry and technology, and its sister site MusicThinkTank. “I’m proud to share that Hypebot and MusicThinkTank have been acquired by Bandsintown,” wrote Bruce Houghton, the founder of the [...]

  • Vertigo Games Believes ‘Location-Based Virtual Reality’

    Vertigo Games Believes ‘Location-Based Virtual Reality’ Is Future of VR

    As virtual reality becomes more and more available, many developers are looking for new frontiers to expand the experiences offered by the tech. For Netherlands-based Vertigo Games, that next frontier is what they call “location-based virtual reality.” It’s essentially high-quality VR experiences where players aren’t tethered to a PC or even to the confines of [...]

  • GDC 2019: Google's Play For Gaming

    GDC 2019: Google's Play for Gaming Ubiquity, Rise of Ray Tracing, Store Wars

    The Game Developers Conference finished up Friday evening, wrapping one of the most exciting GDCs in recent memory with Google’s splashy entrance into AAA video gaming, the emergence of real-time ray tracing as a compelling technology for film, TV, and games, and the growing war between two global estore powerhouses: Valve’s Steam and the Epic [...]

More From Our Brands

Access exclusive content