Charter settlement means up to $150 in refunds for some customers

New York's attorney general settled with Charter Communications over internet speeds.                  Al Seib  Getty Images

New York's attorney general settled with Charter Communications over internet speeds. Al Seib Getty Images

Underwood said the settlement "should serve as a wakeup call to any company serving NY consumers: fulfill your promises, or pay the price".

Facing allegations of defrauding customers, Charter Communications agreed this week to a $174.2 million settlement that includes the largest direct refund payout for a telecom company in USA history, New York Attorney General Barbara Underwood announced on Tuesday.

Charter is also prohibited from describing internet speeds as "consistent" without fully satisfying the FCC Consistent Speed Metric and must make commercially reasonable efforts to deliver access to all online content and services featured in its advertisements. It also provides for free streaming services and premium channels for about 2.2 million customers.

The company, which operates under the Spectrum brand name and includes the former Time Warner Cable, will pay $62.5 million in direct refunds to customers.

These reforms set the stage for major marketing and business reforms across the broadband industry.

Charter will notify subscribers of their eligibility for video and streaming services and provide details for accessing them within 120 days of the settlement. But New York courts refused to let Charter avoid the lawsuit.

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While Charter said that the lawsuit pertained only to Time Warner Cable practices prior to its 2016 purchase of TWC, the AG's office said previous year that the company "continues to underserve their subscribers by failing to make the capital investments necessary to live up to their promised speeds".

That includes direct refunds to over 700,000 subscribers, each of which will receive between $75 and $150, plus over $100 million in premium channels and streaming services that will be offered at no charge to around 2.2 million active subscribers.

Charter will notify subscribers of their eligibility for refunds and disburse them within 120 days.

Note: Charter has already disbursed over $6 million in refunds for inadequate modems to date, separate from today's settlement.

New York's attorney general filed a lawsuit against Charter in February 2017 alleging the company outright lied about internet speeds. Perhaps more importantly, it must also ensure subscribers have the necessary equipment to reach the advertised speeds "under typical network conditions".

The PSC has contended that Charter failed to deliver on benefits to state residents that were part of the earlier merger deal between Time Warner Cable and Spectrum, something that Charter disputes. "We look forward to continue providing the best TV, Internet, Voice and Mobile products to our customers, and to bringing broadband to more homes and businesses across the state", the statement read.

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