Charter is appealing a judge's refusal to dismiss a false advertising lawsuit brought by New York State Attorney General Eric Schneiderman, who alleged the company duped consumers by delivering broadband connections that were slower than promised.
Two weeks ago, New York County Supreme Court Justice Peter Sherwood rejected Charter's arguments that the Federal Communications Commission's broadband rules -- including rules relating to "transparency" about speed -- prevented state officials from bringing their own lawsuits. On Wednesday, Charter filed an appeal with the New York Appellate Division's First Department.
The battle dates to last February, when Schneiderman alleged in a lawsuit 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.)
The complaint included claims that Time Warner failed to provide many customers with modems capable of enabling Web surfing at the advertised speeds, and that the company failed to prevent network congestion.
Charter argued that Schneiderman was trying to hold the company to tougher standards than those set out by the FCC in its transparency regulations. The broadband provider 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 both of those arguments. He specifically said the transparency regulations don't protect broadband providers from lawsuits by state attorneys general, writing that 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."
Sherwood also rejected the idea that companies could advertise speeds of "up to" a certain amount, then deliver slower connections. "Defendants' advertisements gave consumers the net impression that they would consistently receive advertised 'up to' speeds," Sherwood wrote.
Charter's new papers reiterate its claims that the FCC's transparency rules block Schneiderman's suit. The company writes that Schneiderman's allegations regarding connection speeds "directly conflict with the FCC's regime for measuring and disclosing broadband speeds and are therefore preempted."