New York Attorney General Eric Schneiderman is suing Time Warner Cable for allegedly duping consumers by delivering slower Web service than advertised.
Time Warner, now called Spectrum, "conducted a systematic scheme to defraud and mislead subscribers to its Internet service by promising to deliver Internet service that it knew it could not and would not deliver," Schneiderman alleges in an 87-page complaint filed today in New York County Supreme Court.
Since 2012, the broadband provider "fraudulently induced at least 640,000 subscribers in New York State to sign up for high-speed plans that it knew it could not provide," the lawsuit alleges.
Time Warner Cable, which was acquired by Charter last May, priced its broadband service based on speed; the fastest, and most expensive, plans advertised service of 300 Mbps, according to the complaint. But many subscribers received significantly slower-than-promised service, according to the complaint.
"When connecting wirelessly, subscribers on the 300 Mbps plan typically received 15% of the promised speed," the lawsuit alleges. "Subscribers on the 50 Mbps plan received 58% of the promised speed."
Time Warner allegedly didn't provide many subscribers with the kinds of modems that would enable Web-surfing at the advertised speeds.
The complaint also accuses Time Warner of using its subscribers as "pawns" in a "deliberate strategy to extract fees from backbone and content providers."
That allegation appears to stem from Netflix users' well-publicized problems with choppy streams, which resulted from network congestion. In 2014, Netflix largely resolved the issue by entering into agreements to pay providers extra fees in order to interconnect directly with their networks.
Schneiderman now alleges that Time Warner didn't do enough to prevent the congestion from developing. "Spectrum-TWC’s decision not to install the required port capacity led to its interconnection points routinely becoming over-congested with traffic," the complaint says. "This congestion was the result of Spectrum-TWC’s deliberate strategy to use its own subscribers as leverage to extract fees from backbone and content providers."
Columbia law professor Tim Wu, who consulted with Schneiderman's office in the complaints. In October of 2015, while serving as senior enforcement counsel to Schneiderman, Wu launched an investigation into potential false advertising by Verizon, Cablevision and Time Warner Cable.
A Charter spokesman said today the company was "disappointed that the NY Attorney General chose to file this lawsuit regarding Time Warner Cable’s broadband speed advertisements that occurred prior to Charter’s merger."