New York Attorney General Eric Schneiderman has scored a preliminary victory in his lawsuit accusing Charter of duping consumers by delivering slower-than-advertised Web service.
U.S. District Court Judge Colleen McMahon on Thursday rejected Charter's argument that federal laws effectively bar state officials from prosecuting broadband providers for their ad claims.
The judge also sent the case back to New York County Supreme Court, where Schneiderman originally brought the lawsuit.
Schneiderman alleged in a complaint filed in February that Time Warner -- purchased by Charter last year and subsequently renamed 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."
The complaint alleged that Time Warner "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."
Charter's lawyers transferred the matter to federal court, where they argued that it should be dismissed. Among other arguments, Charter said that the Federal Communications Commission is the only agency capable of policing broadband-related matters.
The company specifically argued that the FCC's 2015 net neutrality order prohibits states from imposing inconsistent regulations. Charter also argued that the Federal Communications Act protects the company from prosecution for allegedly violating state advertising laws.
McMahon rejected both of those arguments. The judge wrote that Congress "did not intend for the federal statute to be the exclusive remedy for redressing false advertising and consumer protection claims."
A Charter spokesperson said Friday that the company "will mount a strong defense against the lawsuit’s allegations" involving Time Warner's practices.