Siding against Charter, a New York state judge has refused to dismiss Attorney General Eric Schneiderman's lawsuit alleging that the company duped consumers by delivering broadband speeds that were slower than advertised.
The cable company had argued that the Federal Communications Commission's comprehensive broadband regulations -- including a set of rules mandating "transparency" about speed -- blocked Schneiderman from proceeding with the case.
New York County Justice Peter Sherwood rejected Charter's arguments, ruling on Friday that Congress never intended "to make federal law the exclusive source of law protecting consumers from broadband providers' deceptive conduct."
The decision stems from a lawsuit filed last February, when Schneiderman alleged that Time Warner fraudulently induced at least 640,000 subscribers in New York to purchase plans with speeds higher than the company could provide. (Charter purchased Time Warner in 2016 and subsequently renamed the company Spectrum.)
Schneiderman's complaint includes allegations that subscribers on a plan promising 300 Mbps typically received 15% of the promised speed when connecting wirelessly. Time Warner also allegedly failed to provide many customers with modems capable of enabling Web-surfing at the advertised speeds.
The complaint also alleges that Time Warner didn't do enough to prevent congestion -- apparentlly referring to Netflix users' prior problems with choppy streams. In 2014, Netflix largely resolved the issue by agreeing to pay providers extra fees in order to interconnect directly with their networks.
Charter urged Sherwood to dismiss the case for several reasons, including that the Attorney General's claims appeared to hold Charter to tougher standards than those set out by the FCC in its transparency regulations. But Sherwood ruled that the FCC's transparency regulations don't protect broadband providers from lawsuits by state attorneys general. "The FCC promulgated the Transparency Rule with full recognition of concurrent state authority over deceptive practices, and it is clear that the claims brought here do not conflict with that rule," he wrote.
Charter also argued that the ads only promised consumers speeds of "up to" a certain maximum -- meaning that consumers could expect speeds that were equal to, or slower than, the advertised figure.
Sherwood rejected that argument as well, writing that Charter's position was "contrary to New York law."
"Defendants' advertisements gave consumers the net impression that they would consistently receive advertised 'up to' speeds," Sherwood wrote.
Schneiderman praised the decision, stating it "marks a major victory for New York consumers."
"The allegations in our lawsuit confirm what millions of New Yorkers have long suspected," Schneiderman stated. "Charter-Spectrum has been ripping you off, promising internet speeds it simply could not deliver."