Liar, Liar, ISP on Fire

New York Attorney General, Eric Schneiderman, has set his sights on Charter Communications and its subsidiary Time Warner Cable (TWC). Following a sixteen-month investigation, reviewing internal TWC corporate documents and hundreds of thousands of internet speed tests, Schneiderman has filed a suit alleging the internet service provider (ISP) promised internet speeds it knew it would be unable to honor. The ISP may not have only defrauded its customers, but likely the Federal Communication Commission (FCC) as well.

The FCC uses a system, similar to Nielsen’s metering technology to determine TV viewership, to produce the Measuring Broadband America (MBA) report, which compares promised internet speeds with those actually delivered to consumers. The report is based on monitoring the internet speeds of 4,000 or so internet subscribers across the country. The purpose is to keep ISPs honest and protect otherwise unsuspecting consumers from paying for services that they are not receiving.

TWC troubles trace back to 2013. As a result of out-of-date modems, which the ISP leased to users, customers were paying for internet speeds their modems were incapable of handling. The FCC cut TWC a break in its 2013 MBA report, given that TWC promised to be more vigilant regarding modem and infrastructure updates. But instead, TWC continued to sell high-speed upgrades to customers, without first ensuring that the customers’ current modems could actually accommodate the upgrades. TWC collects about $10 a month on modem rentals for a total of $108 million per year in fraudulently collected fees in the New York State. Charter Communications acquired TWC and has been rebranding as Spectrum; since its acquisition, has “earned billions of dollars in profits from selling high-margin internet service to millions of New York subscribers, while simultaneously declining to make capital investments necessary to improve its network.

TWC also promised to deliver speeds to customers whose modems were up-to-date and therefore capable of handling speeds, but these customers were on infrastructures too old to handle the load. Customers promised the highest level of service were receiving anywhere from 10% to 70% of bandwidth. According to the suit, TWC “provided subscribers with deficient equipment and a network that it knew were both incapable of reliably delivering the promised speeds.”

Reliability is central to the claims against TWC. The customers with up-to-date modems, on networks capable of providing promised speeds, could still find themselves short-changed. The ISP just didn’t have enough bandwidth to go around. Evidence points to TWC officials knowing full well of the shortfall, and therefore sought to shift around bandwidth in order to fool FCC metering and boost their MBA report ratings.

This may be a case of buyer beware; after all, anyone can visit one of a myriad of websites to test internet speeds. However, ISPs, like TWC, are in a position of power, capable of shifting bandwidth and running parallel systems to undermine FCC testing. Consumers are no match for this type of nimble work around, avoiding the frameworks put in place precisely to protect unwary or uninformed consumers. Experts believe this a fairly open and shut case of false advertising and is an example of necessary scrutiny of an otherwise highly concentrated industry. Schniederman’s lawsuit may be

an important warning shot aimed at unscrupulous ISPs across the country, who control our access to the internet, the ethereal lifeblood of modern America.