The State of New York is going after Internet service provider Time Warner Cable for making false claims regarding its connection speeds. The government is claiming the company conducted a systematic campaign to defraud subscribers, dating back at least as far as January 2012.
According to the lawsuit, the company's scheme consisted of two different components. First, Time Warner advertised speeds it knew it was not capable of providing. Secondly, the company promised reliable access to online content that it could not deliver, according to New York Attorney General Eric Schneiderman.
Time Warner Cable, which has since been rebranded as Spectrum-TWC following its acquisition by Charter Communications, is the largest provider of residential Internet service in the state of New York, serving approximately 2.5 million households and generating more than $1 billion annually just from Internet services.
'Unavoidable, Real-World Limitations'
To carry out its scheme, the company provided large numbers of subscribers with older, slower, modems and routers that were physically incapable of connecting to the Internet at the speeds the company had advertised, the complaint noted. In addition, the company deliberately chose not to make changes to its network that would have addressed the problems, according to the attorney general.
"Not only did Spectrum-TWC fail to deliver the promised Internet speeds, it repeatedly assured subscribers that they could achieve the same results with wireless as with a wired connection, even when it knew that the wireless connection suffered from unavoidable, real-world limitations," Schneiderman said in the court filing.
Spectrum-TWC offered Internet service plans that were differentiated by the speeds they offered, with the cheaper plans starting at 2 Mbps (megabits per second ) and the more expensive plans topping out at 300 Mbps.
"Because the plans with the faster speeds were more expensive for subscribers, Spectrum-TWC tried to convince as many subscribers as possible to sign up for these high-speed plans as part of its plan to grow revenue," the attorney general said.
But to prevent customers from actually connecting at the higher speeds, the company deliberately provided more than 900,000 subscribers with outdated equipment that was incapable of reaching the speeds that had been advertised, according to the complaint.
Nevertheless, Spectrum-TWC falsely assured customers the outdated equipment could achieve the advertised speeds and also assured subscribers that their equipment would be upgraded free of charge as network speeds improved, Schneiderman said.
The alleged fraud was uncovered following a test of the company's Internet speeds administered by the Federal Communications Commission (FCC), which determined the older modems could not even reliably reach speeds of 20 Mbps.
In response, the company promised the FCC it would replace the older equipment free of charge for all of its subscribers. Spectrum-TWC never fulfilled that promise, although it continued to charge customers for connection speeds they were not experiencing, according to the complaint.
Even subscribers who had faster modems and routers were unable to achieve the speeds advertised. The complaint alleged that the company deliberately managed its network in such a way as to prevent any subscribers from taking advantage of the advertised speeds. The attorney general is seeking restitution for subscribers and civil penalties against the company.