New York Attorney General Eric T. Schneiderman is suing Charter Communications for allegedly defrauding customers by continuously promising Internet speeds it knew it could not deliver. The suit pertains to the Time Warner Cable properties that Charter acquired last year, but importantly, the New York AG claims that Charter "continues to underserve their subscribers by failing to make the capital investments necessary to live up to their promised speeds."
According to the complaint, Charter Communications Inc. , which serves approximately 2.5 million customers via the Time Warner Cable footprint in New York, has been leasing both cable modems and WiFi routers to subscribers that can't support the speeds those individuals are paying for. In the most recent data cited, Schneiderman said that as of February 2016 (still prior to the Charter acquisition), more than 185,000 TWC customers were paying $10 per month for modems that could not deliver advertised speeds, and more than 250,000 customers were supplied WiFi routers that couldn't stream data up to the promised rates of 200 and 300 megabits per second.
The New York lawsuit also alleges that the Time Warner Cable network was not designed and maintained to deliver reliable broadband service, with the company deliberately declining to make the necessary investments over several years to bring service up to par. The Attorney General said the suit was based on a 16-month investigation by his office.
In response to the New York lawsuit, Charter has issued a statement suggesting it shouldn't be held accountable for the failures of Time Warner Cable before the company was acquired.
The full statement reads: "We are disappointed that the NY Attorney General chose to file this lawsuit regarding Time Warner Cable’s broadband speed advertisements that occurred prior to Charter’s merger. Charter made significant commitments to NY State as part of our merger with Time Warner Cable in areas of network investment, broadband deployment and offerings, customer service and jobs. In addition, Charter was among the highest rated broadband providers in the 2016 FCC Broadband Report. Charter has already made substantial investments in the interest of upgrading the Time Warner Cable systems and delivering the best possible experience to customers. We will continue to invest in our business and deliver the highest quality services to our customers while we defend against these allegations involving Time Warner Cable practices."
As part of the agreement to acquire TWC, Charter committed to delivering broadband speeds of 300 Mbit/s in regions where those service tiers were already deployed. (See Coming Soon: The New Cable Trinity.)
Without naming the cost of a potential payout, the New York Attorney General's office has said it is "seeking restitution for New York consumers as well as appropriate injunctive and equitable relief."
— Mari Silbey, Senior Editor, Cable/Video, Light Reading