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Schneiderman outlines impact of Spectrum-Time Warner Cable's alleged fraud in Western New York

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Thu, Feb 2nd 2017 08:00 pm

Issues consumer alert to assist New Yorkers in choosing the best internet service

Spectrum has over 570,000 subscribers in WNY, AG's office received more than 300 complaints 

Attorney General Eric T. Schneiderman issued a consumer alert on Thursday to provide New Yorkers with tips for selecting the best internet service plan. This consumer alert follows the attorney general's announcement Wednesday of his office's lawsuit against Charter Communications Inc. and its subsidiary Spectrum Management Holdings LLC, (f/k/a Time Warner Cable Inc.; together, Spectrum-TWC) for allegedly conducting a deliberate scheme to defraud and mislead New Yorkers by promising internet service that they knew they could not deliver.

With over 570,000 subscribers in the Western New York region, Spectrum-Time Warner Cable is the largest supplier of internet service in the state. The complaint alleges that, since January 2012 Spectrum-TWC's marketing promised subscribers who signed up for its internet service that they would get a "fast, reliable connection" to the internet from anywhere in their home. But a 16-month investigation by the attorney general's office - which included reviewing internal corporate communications and hundreds of thousands of subscriber speed tests - found Spectrum-Time Warner subscribers were getting dramatically short-changed on both speed and reliability.

"Reliable internet is vital for millions of New York families and businesses," Schneiderman said. "As alleged in our complaint, our 16-month investigation found that Spectrum-Time Warner Cable's 2.5 million subscribers in New York were repeatedly cheated into paying more (for) internet speeds the company knew it would not provide. That's just wrong. I encourage consumers to read our tips to ensure they don't pay extra for speed their provider just cannot deliver."

The attorney general's office looked into thousands of complaints from New York subscribers, including more than 300 from Western New York.

The suit alleges subscribers' wired internet speeds for the premium plan (100, 200 and 300 Mbps) were up to 70 percent slower than promised; Wi-Fi 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 that could not achieve speeds promised in their slower plans. 

The consumer alert will provide consumers with a guide to asking the right questions in order to determine the appropriate internet plan for their households needs. When choosing an internet plan, consumers ask the following:

  • What will you be using the internet for?
  • How much speed do you really need?
  • What equipment do you need?
  • How much speed are you actually getting?

Internet Service Providers ("ISPs") offer a variety of speeds that are measured in "megabits per second" ("Mbps") from as low as 6 Mbps to upward of 100, 200 or even 1,000 Mbps. Internet users should consider how they'll be using their internet and what speeds are recommended for these internet applications.

Consumers should also consider whether they'll need a modem and/or router to connect to the internet in their home and ensure that it's compatible with their ISP's network. Keep in mind that, as technology evolves, modems and routers will need to be able to handle more and more speed.

The AG's investigation also found Spectrum-TWC executives knew 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.

Finally, consumers should check to see what speed they're actually receiving, rather than relying on the promises of their internet service provider. There are a number of online tools that can help check speed:

If you're not receiving the speed you're paying for, find out why and call your internet service provider. The problem may be as simple as needing to move your router to a better location in your house. Or it could be an issue that only your provider can fix, such as performing maintenance on its network.

"New York consumers care deeply about the quality and cost of their broadband internet service," said Chuck Bell, programs director for Consumers Union. "In the 21st century, broadband internet is an essential telecommunications service that New Yorkers rely on to be informed citizens, to advance their knowledge and learning, to keep in touch with family, to pay bills and arrange for health care, to name just a few vital uses. Consumers Union asked our New York state members about the quality of their internet service last year, and over 650 people quickly responded by taking a broadband speed test and sending the results to the attorney general. The bottom line is that consumers deserve to get the broadband speeds they are paying for, and that are touted in company marketing claims and advertising. We are extremely pleased that Attorney General Schneiderman and his staff are fighting for consumers on this issue, by investigating customer complaints, and holding internet providers accountable for what they promise."

"The attorney general's detailed allegations of widespread false advertising and deceptive practices by Spectrum-Time Warner Cable in marketing and providing high-speed broadband service are highly disturbing," said NYPIRG General Counsel Russ Haven. "In 2017, access to broadband is essential for connecting with the world. It's fundamental that consumers are entitled to get what they're promised when they plunk down their hard-earned money for products and services." 

As the complaint alleges, Spectrum-TWC continues to underserve its subscribers by failing to make the capital investments necessary to live up to their promised speeds. These investments would include substantially upgrading Spectrum-TWC's network capability and replacing large numbers of deficient modems and wireless routers that subscribers currently pay Spectrum-TWC up to $10 per month to rent.

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