(TNS) — Spectrum has agreed to pay $18.8 million to settle allegations its predecessor, Time Warner Cable, used misleading advertising to lure California consumers into paying for high-speed internet services the company could not deliver.
The settlement, the largest ever secured by the Los Angeles County District Attorney’s Office, is similar to one reached between the company and the New York Attorney General’s Office in December 2018.
Under the settlement with the Los Angeles District Attorney Jackie Lacey’s office, the company will pay $16.9 million in restitution directly to eligible customers based on the type of service they purchased from Time Warner Cable. It also agreed to pay $1.9 million to the three prosecuting agencies in the case to cover costs associated with the investigation and prosecution.
The agreement covers more than 170,000 California consumers who did not get the internet speeds they paid for.
Lacey’s office said some California customers were issued outdated modems, making it impossible for them to receive the higher bandwidth they purchased. Others paid for higher internet speeds that Time Warner’s infrastructure could not deliver, according to her office.
Lacey’s office and the district attorneys of San Diego and Riverside counties filed a lawsuit against the company alleging unlawful business practices by Time Warner Cable starting in 2013.
Eligible customers will receive $90 in a one-time credit on their bills. Customers who were issued outdated modems and paid for higher internet speeds will be eligible to receive a $180 credit. Spectrum is required to issue the credits to all eligible consumers within 60 days.
In addition, the company will offer three free months of Showtime to cable TV subscribers. Customers with only internet service will be offered one free month of the Spectrum Choice entertainment streaming package.
The company did not admit liability, but it did agree not to advertise any internet speed tier it knows or should reasonably know it cannot consistently deliver during peak hours. The agreement also requires the company to make sure customers are issued equipment that can deliver advertised speeds.
Charter Communications bought Time Warner Cable in May 2016 and re-branded its internet and cable TV service under the Spectrum name. It is the second largest cable operator in the country, behind only Comcast.
Spectrum issued a statement saying it was pleased to have reached the settlement “regarding certain Time Warner Cable advertising practices in California prior to our 2016 merger.”
“We cooperated fully in the review, have resolved this matter comprehensively, and this is expressly not a finding nor an admission of liability,” it said.
In the New York case, Spectrum agreed to pay a record $174.2 million, including $62.5 million in direct refunds of $75 and $150 to over 700,000 New York subscribers, to settle allegations that the company, the largest internet service provider in the state, did not deliver the reliable and fast internet service it promised in its advertising.
The New York settlement was believed to be the largest-ever payout to consumers by an internet service provider in U.S. history.
©2020 Syracuse Media Group, N.Y. Distributed by Tribune Content Agency, LLC.
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