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Charter Spectrum agrees to record $174M settlement; customers to receive refunds

December 18, 2018 08:33 PM

NEW YORK (WHEC) - Charter Spectrum will pay a record $174.2 million and refund New York customers $62 million in a settlement over claims it defrauded internet subscribers, the New York Attorney General's Office announced Tuesday.

The direct refunds to consumers are the largest payout by an internet service provider in U.S. history. More than 700,00 active subscribers will each receive between $75 and $150. In addition to the direct refunds, approximately 2.2 million active subscribers will also get streaming services and some premium channels for free. 

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The deal includes $62.5 million in cash for customers.

Seven hundred thousand of them who've had slow modems or slow wifi will get $75 apiece and 150,000 of them who've had inadequate modems for more than two years will get another $75 apiece.

Spectrum has also agreed to $100 million in "additional restitution," which means free streaming services and premium channels for customers who've long been frustrated at low speeds. 

“This settlement should serve as a wakeup call to any company serving New York consumers: fulfill your promises, or pay the price,” Attorney General Underwood said. “Not only is this the largest-ever consumer payout by an internet service provider, returning tens of millions of dollars to New Yorkers who were ripped off and providing additional streaming and premium channels as restitution – but it also sets a new standard for how internet providers should fairly market their services.”

Charter is also required to implement a series of new marketing and business reforms, including the requirement to describe internet speeds as “wired” and to substantiate them through regular speed testing.

Charter issued the following statement to News10NBC regarding the settlement:

“We are pleased to have reached a settlement with the Attorney General on the issue of certain Time Warner Cable advertising practices in New York prior to our merger, and to have put this litigation behind us. Charter has made, and continues to make, substantial investments enhancing internet service across the state of New York since our 2016 merger, as acknowledged by the Attorney General in this settlement. 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 company is also in a separate battle with the state Public Service Commission (PSC) over its expansion of internet service in New York. Charter has until Feb. 11 to submit its plans to exit the state.

This comes after the two sides came to an agreement on key issues including fines the company would pay and a plan to expand internet service. Those issues would have to be part of any settlement deal.

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