• by Wendy Davis  @wendyndavis, May 2, 2018

An appellate court in New York could soon decide whether state Attorney General Charter Eric Schneiderman can pursue a broad range of false advertising claims against Charter over broadband speeds.

While the battle centers on false advertising laws, it also presents questions about the ability of states like New York to enforce their own consumer protection laws regarding net neutrality, privacy and other broadband-related issues. In the five months since the Federal Communications Commission repealed the net neutrality regulations, dozens of states have considered -- and in some cases passed -- their own version of open Internet rules.

The legal dispute between Charter and Schneiderman dates to February 2017, 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.)

Ads for Time Warner's service allegedly included promises of a “blazing fast, super-reliable connection,” "no interruptions," and "no slowdowns," but subscribers actually experienced significant congestion, according to the Attorney General. Schneiderman's complaint includes allegations that subscribers on a plan promising 300 Mbps typically received 15% of the promised speed when connecting wirelessly.

The complaint also alleges that Time Warner didn't do enough to prevent congestion -- apparently referring to Netflix subscribers' 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.) Time Warner also allegedly failed to provide many customers with modems capable of enabling web-surfing at the advertised speeds, according to the complaint.

Earlier this year, New York County Supreme Court Justice Peter Sherwood rejected Charter's motion to dismiss the lawsuit. Charter unsuccessfully raised numerous arguments, including that its disclosures regarding broadband speed complied with the Federal Communications Commission's 2010 transparency requirements.

Now, Charter is asking New York's Appellate Division to dismiss several of the Attorney General's claims.

The broadband company says its representations about broadband speeds complied with the Federal Communication Commission's requirements for "transparency."

The company says that even though the FCC requires companies to disclose "actual" broadband speeds, defining actual speeds isn't straightforward.

"Defining and measuring actual speeds is complex and challenging, and has occupied the FCC’s attention for over a decade," Charter argues in its appellate papers.

Charter adds that it followed an FCC approved methodology based on mean and median speeds between 7 p.m. and 11 p.m on weeknights. The company says its adherence to an FCC standard effectively blocks state officials like Schneiderman from suing.

"This case involves the Attorney General’s attempt to take statements the FCC defines as truthful and to redefine them as false under state law," Charter contends.

"The Attorney General’s efforts to punish a provider for adhering to federal law -- or to require broadband disclosures that sharply diverge from the FCC’s methodology -- are plainly unlawful."

Schneiderman counters in papers filed last week that Congress intended for both the FCC and individual states to police broadband providers. "The company can easily comply with both federal and state obligations," the Attorney General argues.

"Charter may use the 'average' or 'median' speed figures in both its Transparency Rule disclosures and its New York advertisements, so long as the advertisements correctly convey what the 'average' or 'median' speed figures actually represent," Schneiderman argues.

He adds that Charter could use other methodologies -- also approved by the FCC -- for measuring speed, or could "simply decline to advertise numerical speeds to New York consumers at all, and instead compete based on relative speeds or any competitive advantage in content or customer service."

Advocacy group Public Knowledge weighed in against Charter this week with a friend-of-the-court brief. "Broadband consumer protection has long been shared between states and the federal government," Public Knowledge writes.

The organization -- which has heavily criticized recent FCC decisions to abandon Obama-era broadband polices, including the net neutrality and privacy rules -- adds that state officials' authority to prosecute broadband providers "becomes especially vital when the federal watchdog elects to abdicate its responsibilities."

The group adds: "If New York is unable to protect its own broadband consumers in this circumstance, there is no reason to believe that the FCC will. Rather, no one will."