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Charter Communications agrees to nine-figure New York settlement

December 19, 2018

Charter Communications will pay approximately $174 million to settle charges that it misled internet subscribers in New York, including a record eight-figure payout to consumers, the state’s attorney general announced Tuesday.

The settlement resolves a 2017 lawsuit filed by the attorney general’s office alleging that the state’s largest internet service provider denied customers reliable and fast internet service that it had promised. The $62.5 million in direct refunds to consumers is believed to represent the largest such payment by an ISP in the U.S.

“This settlement should serve as a wake-up call to any company serving New York consumers: fulfill your promises, or pay the price,” New York state Attorney Gen. Barbara Underwood said in a statement. “Not only is this the largest-ever consumer payout by an internet service provider, returning tens of millions of dollars to New Yorkers who were ripped off and providing additional streaming and premium channels as restitution — but it also sets a new standard for how internet providers should fairly market their services.”

A message left Tuesday for a Charter spokesman was not immediately returned.

The settlement includes direct restitution of $62.5 million for more than 700,000 active subscribers, who will each receive between $75 and $150, as well as streaming services and premium channels, with a retail value of over $100 million, at no charge for approximately 2.2 million active subscribers.

In addition, Charter will be required to implement a number of reforms, including the requirement to describe internet speeds as “wired” and prove them through regular testing.

Charter has faced intense scrutiny of its operations in New York operations since its $55 billion acquisition of Time Warner Cable in 2016.

In July, the state’s Public Service Commission announced it would revoke its approval of the merger and fined Charter another $1 million.

The commission has accused Charter of consistently failing to meet deadlines, trying to avoid commitments to rural communities, carrying out unsafe field practices and making misleading statements about its performance and compliance requirements.

Charter has disputed the commission’s allegations and has said that it has extended the reach of its broadband network to more than 86,000 New York homes and businesses since the PSC approved the merger.

Company shares closed Tuesday at about $306, down about 1 percent from their Monday finish.

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