Charter Communications has agreed to pay a record $174.2 million for defrauding its New York customers of fast and reliable internet services.
The landmark payout will directly distribute $62.5 million to 700,000 customers who subscribed to Time Warner Cable’s cable and internet service before it was acquired by Charter in May 2016.
“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,” Charter said in a statement to The Post.
Terms also call for Charter to provide free streaming services and premium channels — valued at more than $100 million — to 2.2 million subscribers.
The settlement resolves a complaint filed last year by then-New York State Attorney General Eric Schneiderman that accused Charter of leasing deficient modems and wireless routers that resulted in internet speeds 80 percent slower than advertised.
Schneiderman’s successor Attorney General Barbara D. Underwood announced the settlement on Tuesday, calling it “a wakeup call to any company serving New York consumers.”
“Fulfill your promises or pay the price,” Underwood said.
The AG also charged Stamford, Conn.-based Charter with guaranteeing customers seamless access to internet content while simultaneously engaging in hardball tactics with content providers like Netflix.
Frozen screens, extended buffering and reduced picture quality were a frequent byproduct of those tactics, according to the AG’s complaint.
In February, the state Supreme Court in Manhattan rejected Charter’s claim that federal law preempted the AG’s suit.
Charter then moved to dismiss the claim on various grounds after its return to state court — but failed on all counts. After Charter appealed in state court, the AG’s office prevailed again.
The settlement for complimentary services includes a free month of Charter’s Spectrum TV Choice streaming service and a free month of Showtime to all of its internet-only customers. For subscribers to Charter’s cable and internet services, the payout increases to three free months of HBO or six free months of Showtime.
Charter must notify those eligible for a payback in the next 120 days.
In addition to the payouts, Charter has agreed to market its internet speeds as “wired” and to substantiate them through regular speed testing.
“These reforms set the stage for major marketing and business reforms across the broadband industry,” the AG’s office said in a statement about the settlement.
The AG complaint was separate from a state action in May to consider revoking Charter’s New York license over “potential violations of its franchise agreement.”
Unlike the AG’s suit, the New York State Public Service Commission claimed Charter had failed to adequately roll out its internet service to rural communities, which it had promised to do when it merged with Time Warner Cable.
Charter is scheduled to submit a plan to serve the slighted communities in January or face a May deadline for exiting the state.
