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Charter-Spectrum reaches $174.2 million settlement in New York AG’s speed fraud lawsuit

Charter-Spectrum reaches $174.2 million settlement in New York AG’s speed fraud lawsuit


The lawsuit, filed last year, alleged that Charter’s speeds were 80 percent slower than advertised

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Charter Communications, the parent company of Spectrum, has agreed to a $174.2 million settlement with Attorney General Barbara Underwood, following the 2017 lawsuit that saw the AG’s office sue the internet provider over misleading internet speeds. The lawsuit, led by then-Attorney General Eric Schneiderman alleged that speeds were up to 80 percent slower than advertised.

According to the New York Daily News, the $174.2 million payout will come in two forms: $62.5 million that will be refunded to 700,000 active customers (each will get between $75 and $150) and an additional $110 million in free streaming services and premium cable channels distributed to 2.2 million subscribers in New York. According to Underwood, the total settlement adds up to “the largest-ever consumer payout by an internet service provider.”

Per the attorney general’s office, that money will be distributed largely to customers who rented a modem or router from Spectrum, as well as customers subscribing to a legacy Time Warner Cable plan (from before Charter purchased the company) of 100 Mbps or higher. Customers who fit those categories will get $75 back, with an additional $75 to the roughly 150,000 customers who rented an inadequate modem for 24 months or more.

As for the streaming and cable services, Charter will be giving all customers who subscribe to both cable and internet either three free months of HBO or six free months of Showtime. Internet-only customers will get a free month of Charter’s Spectrum TV Choice streaming service and a free month of Showtime.

If you’re eligible for any of the above, expect to hear from Charter sometime in the next 120 days for more information.

Charter must prove its internet speeds through “industry-accepted testing” going forward

Additionally, as noted by Underwood in a series of tweets this morning, the settlement will also require Charter to prove its internet speeds through “industry-accepted testing,” removing any plans that don’t pass muster. It also must be more truthful in its advertising and detail what kinds of speeds users should actually expect.

Furthermore, Charter will now be required to provide its customers with hardware that can actually reach the advertised speeds it offers, and replace routers and modems that currently can’t with models that can.

In a statement to The Verge, Charter commented that “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.”

The attorney general’s lawsuit is separate from the New York State Public Service Commission’s attempt to have Charter thrown out of the state. Unlike the AG’s lawsuit, the Public Service Commission claims that Charter failed to adequately roll out its internet service to rural areas, which it had promised to do when it merged with Time Warner Cable. That process originally saw Charter receive a 60-day time period to figure out an exit plan and then leave six months after that. As of now, Charter is still appealing that decision. According to the last public update, Charter was supposed to submit a plan to the Public Service Commission on November 8th, with a May 8th, 2019 date for leaving New York, per Ars Technica, but negotiations are still ongoing.

Update December 18, 4:35pm: Added statement from Charter.