Spectrum-Time Warner Cable charged almost 5 million subscribers for internet speeds it couldn't actually deliver, according to a lawsuit filed by the New York Attorney General's Office Wednesday.
New York Attorney General Eric Schneiderman accuses the company of "a systematic scheme to defraud and mislead subscribers" since January 2012 by promising fast internet speeds that it "could not and would not deliver," according to the complaint.
“The allegations in today’s lawsuit confirm what millions of New Yorkers have long suspected — Spectrum-Time Warner Cable has been ripping you off,” Attorney General Eric Schneiderman said in a statement.
Charter, which merged with Time Warner Cable in May 2016, said in a statement to BuzzFeed News that these broadband speed advertisements occurred prior to the merger, and it has made "substantial investments in the interest of upgrading the Time Warner Cable systems and delivering the best possible experience to customers."
An investigation of corporate communications showed that customer service representatives were incentivized to persuade subscribers to sign up for high-speed plans by tying their pay to the revenue from the subscriptions.
But the lawsuit alleges subscriber speed tests showed the wired internet speeds for were up to 70% slower than promised and Wi-Fi speeds were more than 80% slower. New York Spectrum-Time Warner Cable subscribers paid as much as $109.99 per month for the plans.
Spectrum-Time Warner Cable promised subscribers "fast" access to online content like Netflix, Hulu and games, but it couldn't deliver on that promise, the Attorney General's Office alleges.
"Specifically, the company was aware of, and sometimes deliberately created, bottlenecks at interconnection points, which resulted in slowdowns and disruptions to subscribers’ service," it said.
The company leased modems to subscribers that couldn't support the promised internet speeds and refused to upgrade its network to cut costs, the complaint alleges. To cover up this misconduct, Spectrum-Time Warner Cable rigged internet speed test results.
"Executives traded on the fact that most subscribers had a limited choice of Internet service providers," the New York Attorney General's Office said. "And that the technical complexity of deducing the problems would make it difficult for subscribers to pin the blame on the company."
Tim Wu, a law professor at Columbia University who assisted with the first year of the Attorney General office's investigation, told BuzzFeed News that the suit is "groundbreaking" because "it puts the consumer first" in a new way that gets to some of the problems in the industry.
"For the first time it holds cable companies to account for what they say," he said. "It also relies on the idea that when you promise the consumer an internet service, they have to give them the internet service they paid for."
Wu said it is "very possible" other Attorney General offices may investigate internet speeds advertised by providers in their areas. The New York Attorney General office is in an ongoing investigation of internet providers across the state.
"Companies want to claim they have the fastest speeds to get money out of people," said Wu. "It was only matter of time before someone took a hard look at it."
Charter said it "will continue to invest in our business and deliver the highest quality services to our customers while we defend against these allegations involving Time Warner Cable practices."
Spectrum-Time Warner Cable currently has approximately 2.5 million subscribers across New York State.
The lawsuit is seeking restitution for affected subscribers, civil penalties against the company and injunctive relief from these practices.