New York AG Sues Charter For Slow Broadband Speeds, Says Company 'Ripping Off' Users With Substandard Service

from the the-George-Carlin-definition-of-customer-service dept

For some time now, New York Attorney General Eric T. Schneiderman has been taking broadband companies to task for advertising broadband speeds they consistently fail to deliver. Last year, Schneiderman's office brought in Tim Wu, Columbia professor and the man who coined the term net neutrality, to help dig into the data. With Wu as the AG's "senior lawyer and special adviser," Schneiderman sent letters to NYC area broadband incumbents Verizon, Cablevision and Time Warner Cable -- questioning whether they actually deliver the speeds they advertise.

This morning, Schneiderman made his findings clear via a lawsuit against Charter Communications, which accuses the cable giant of "defrauding" millions of customers by advertising broadband speeds it's incapable of delivering. According to the AG's compiled data and full complaint (pdf), Charter routinely and consistently advertised "fast, reliable connections" that were anything but:

"The suit alleges that subscribers’ wired internet speeds for the premium plan (100, 200, and 300 Mbps) were up to 70 percent slower than promised; WiFi speeds were even slower, with some subscribers getting speeds that were more than 80 percent slower than what they had paid for. As alleged in the complaint, Spectrum-TWC charged New Yorkers as much as $109.99 per month for premium plans could not achieve speeds promised in their slower plans.

The complaint also alleges that Charter (now branded as Spectrum) and Time Warner Cable (recently acquired in Charter's recent $79 billion megamerger) knew full well they were shortchanging customers and lagging in necessary upgrades, and they just didn't give much of a damn:

"The AG’s investigation also found that Spectrum-TWC executives knew that the company’s hardware and network were incapable of achieving the speeds promised to subscribers, but nevertheless continued to make false representations about speed and reliability. The investigation further revealed that while Spectrum-TWC earned billions of dollars in profits from selling its high-margin Internet service to millions of New York subscribers, it repeatedly declined to make capital investments necessary to improve its network or provide subscribers with the necessary hardware."

It's worth noting that government data fairly consistently shows that ISPs usually deliver advertised speeds. Back in 2011, the FCC began recruiting volunteers who use custom-firmware embedded routers to provide real-world broadband connection performance data. Initially, the FCC found that many ISPs didn't deliver advertised speeds. But as the agency increasingly named and shamed the worst offenders, many ISPs began over-provisioning their broadband tiers -- effectively giving users more bandwidth than was advertised. The program was a relative success, but it's not likely to be continued under the new, more industry cozy FCC.

That said, the volume of traffic generated by New York City residents requires a little extra effort; effort that tends to not materialize when companies face limited competition. In New York, Charter acquired Time Warner Cable, whose biggest competitor was Verizon -- a company that has little to no interest in even being in the fixed-line broadband market, and has taken repeated heat from New York City officials for failing to uniformly upgrade the company's fiber network (taking subsidies and tax breaks then failing to do much with them has been Verizon's MO for a generation).

To be clear, Schneiderman drawing attention to Charter's failure is generally a good thing. That said, failures to track how subsidies are spent, failures to hold ISPs accountable for failed promises, the relentless thirst for consolidation, and the negative repercussions of blindly approving telecom megamergers -- are all ignored by most regulators (and Schneiderman) pretty much on a weekly basis. So when someone like this comes sweeping in late in the game to protect consumers, you should probably ask why they aren't doing more, more consistently, to protect telecom customers before the bill arrives.

With the priority in the telecom sector being megamergers, buying protectionist state laws and extracting ever-more money for the same relatively dismal service, it's not particularly surprising that the companies offer poor service at high prices, with some of the worst customer service in any industry in America. And with a Trump-era FCC preparing to let these companies dictate telecom policy for the forseeable future, and Wall Street gushing over the idea of a possible Verizon-Charter supermerger, you'd have to use some pretty creative mathematics to suggest this scenario gets better anytime soon, belated NY AG lawsuit or not.

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Filed Under: advertised speeds, broadband, eric schneiderman, ny, service
Companies: charter


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  1. icon
    DOlz (profile), 2 Feb 2017 @ 5:29am

    Turn things around

    These are big profitable companies with the resources to make these upgrades without help. If we’re going to b̶r̶i̶b̶e̶ give them incentives to do their job, lets turn things around. They only get the subsidies and tax breaks after the work is completed.

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