×
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

  • Murder Mystery

    Netflix Reveals Record-Breaking Stats for Sandler-Aniston 'Murder Mystery' Flick

    “Murder Mystery,” the latest Adam Sandler film to debut on Netflix, broke viewing records on the streaming service, the company revealed Tuesday. The film, which is co-headlined by Jennifer Aniston, was seen by close to 30.9 million households in its first 3 days, according to a tweet sent out Tuesday afternoon. 🚨ADAM SANDLER AND JENNIFER [...]

  • Charles Caldas To Step Down as

    Charles Caldas To Step Down as Merlin CEO

    Charles Caldas, the only CEO that the independent-label collective Merlin has ever known, announced today that he will step down from his post at the end of 2019, after more than 12 years at the helm of the global rights organization. He will continue his current duties until then and work with the Merlin board to [...]

  • Vice Media Digital Makeover Triggers Traffic

    Vice Media Digital Makeover Triggers Traffic Slide

    Life on its own online isn’t easy for Vice Media. Ending the digital publisher’s controversial practice of rolling up web traffic for partner sites into an aggregated number resulted in the total domestic traffic falling nearly by half between March 2019 and the following month, according to Comscore. The numbers improved slightly for May, when [...]

  • Merlin Reports Record Distributions for 2019

    Merlin Reports Record Distributions for 2019

    Global indie-label collective Merlin reported record distributions in its 2019 membership report, paying $845 million to label and distributor members between April 2018 and March of this year. That figure, a 63% year-over-year increase, includes more than $130 million paid out this year from non-royalty income — and included in that figure is the estimated [...]

  • Sarah Iooss - Twitch

    Twitch Hires Sarah Iooss, Former Mic and Viacom Exec, as Head of North America Sales

    Twitch has tapped Sarah Iooss, most recently EVP of revenue at millennial-news startup Mic, to lead the advertising sales team in North America for the Amazon-owned live-streaming video platform focused on video gaming. Iooss will be based in New York, reporting to chief revenue officer Walker Jacobs, who joined Twitch last fall after serving as [...]

  • Calibra app

    Spotify: Facebook's Libra Cryptocurrency Will Help Subscription Services

    When Facebook officially announced its plans for a new cryptocurrency called Libra Tuesday, it also revealed that Spotify was part of a consortium of companies called the Libra Association that is backing the project. The music service hopes that digital money can help subscription services sign up new customers. “One challenge for Spotify and its [...]

  • And Then We Danced

    Swedish Outfit French Quarter Steps Into TV With Graphic Novel Adaptation

    Swedish production company French Quarter, the outfit behind Cannes Directors’ Fortnight entry “And Then We Danced,” is venturing into TV with a web series adapted from Henrik Bromander’s graphic novel “Kurs I självutplåning” (“Course in self-annihilation”). The comedy series has been commissioned by the Swedish broadcaster SVT, as first reported by Nordic Film & TV [...]

More From Our Brands

Access exclusive content