Spectrum Customers To Get Cash For Slow Internet Under Settlement

NEW YORK — New York State's largest internet service provider will pay $62.5 million in refunds to customers who faced slower-than-promised internet speeds, officials announced Tuesday.

Under a massive settlement with the state attorney general's office, Charter Communications — which provides internet service under the Spectrum brand — will pay at least $75 to more than 700,000 customers who were given faulty modems or wireless routers or paid for high-speed service that the company didn't reliably deliver, officials said.

Charter will also give 2.2 million customers free access to premium TV channels or online video streaming, a benefit worth $100 million, according to the attorney general's office.

Those concessions account for the bulk of the $174.2 million settlement in a consumer fraud case against Charter. The refunds alone are the biggest payout by an internet service provider in the nation's history, the AG's office said.

"This settlement should serve as a wake-up call to any company serving New York consumers: fulfill your promises or pay the price," Attorney General Barbara Underwood said in a statement.

The settlement is the latest blow to Charter, which has drawn the recent ire of labor unions, politicians and regulators. The state's Public Service Commission in July revoked its approval of Charter's merger with Time Warner Cable and moved to boot the company from the state.

Underwood's office said it sued Charter in state Supreme Court last year for allegedly failing to provide promised internet speeds and reliability. Charter unsuccessfully fought the suit by trying to move it to federal court and asking for its dismissal, Underwood's office said.

Charter spokesman John Bonomo said the settlement was related to advertising practices Time Warner used before the companies merged.

"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," Bonomo said in a statement.

"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."

The AG's office accused Charter of leasing faulty modems and routers that did not deliver the speeds customers had paid for and of failing to keep up enough network capacity to provide fast speeds for which the company charged higher rates.

Charter also said customers could get the same speeds over both wired and wireless connections, when in fact wireless service is often slower, the AG's office said. The company committed in the settlement to advertise internet speeds as "wired" and back them up with regular testing, officials said.

Additionally, Charter used "hardball tactics" with outside companies such as Netflix that subjected its customers to lengthy buffering, frozen screens and diminished picture quality, according to the AG's office.

The settlement bans Charter from making "unsubstantiated" claims about internet speed and reliability and requires the company to provide customers with equipment that can actually deliver the advertised speed, the AG's office said.

The company must also train customer service and other workers to tell customers about the factors that affect internet speeds, officials said.

Charter will reach out directly to eligible customers about compensation they may receive from the settlement, Bonomo said.

(Lead image: Spectrum trucks are seen in Florida in September 2018. Photo by John Raoux/Associated Press)