Charter has agreed to a settlement valued at $174.2 million to resolve a suit brought against the company by the attorney general of the state of New York. The Charter New York settlement came in response to charges that the cable company did not deliver advertised broadband speeds.
The charges were made in 2017 and dated back as far as 2012. For much of that time, the cable properties in question were owned by Time Warner Cable, which Charter acquired in 2016.
Charter New York Settlement
According to a press release from New York Attorney General Barbara D. Underwood, the Charter New York settlement includes refunds to 700,000 subscribers valued at $62.5 million, along with free streaming services and premium channels with a retail value of more than $100 million. Approximately 2.2 million subscribers will get the free services.
Customers getting the direct refunds are those who were equipped with “outdated” modems and routers and with premium speeds plans that consistently failed to deliver advertised speeds, according to the New York attorney general. Each of those subscribers will get a refund valued at between $75 and $150.
Customers receiving the free services include those to whom the cable company failed to deliver third-party internet content that it had advertised, the attorney general said.
The cable company’s inability to deliver third-party content related to the company’s “hardball tactics” toward Netflix and other third-party content providers. Those tactics “at various times, ensured that subscribers would suffer through frozen screens, extended buffering, and reduced picture quality,” according to a press release from the New York attorney general.
The 2017 suit describes those “hardball tactics,” which involved declining to upgrade connections to content providers when content providers declined to pay for imbalances in traffic sent from one network to the other. That practice was commonly used by internet service providers in the early part of this decade but declined industry-wide as the result of a 2015 FCC ruling.
As part of the new settlement, Charter also agreed to make certain enhancements to its New York internet network and to implement marketing and business reforms, including a requirement to describe internet speeds as “wired” and to conduct regular testing to substantiate those speeds.
The requirement to describe internet speeds as “wired” came in response to the attorney general’s concerns about marketing messages that claimed internet speeds were “equally available, whether connecting over a wired or WiFi connection – even though, in real-world use, internet speeds are routinely slower via WiFi connections.”
Some Issues Still Open
The Charter New York settlement does not resolve ongoing efforts by the state of New York to force Charter to sell its New York holdings. The state said earlier this year that Charter had repeatedly failed to meet buildout requirements that were a condition of public service commission approval of the Time Warner Cable acquisition. Charter said it was unable to meet deadlines because utility pole owners have been slow in approving Charter’s applications to use the poles.
According to a report from Multichannel News, Charter was recently granted an extension until February to submit a plan to exit the state. Meanwhile Charter and the PSC continue to negotiate a settlement that would enable the company to continue to operate in the state.