Free HBO or Showtime, video streaming services and cash refunds are coming to some Charter Communications customers across New York under a $174.2 million settlement with the state attorney general's office over slower-than-promised internet speeds.
Under the settlement announced Tuesday, Charter agreed to pay back $62.5 million to more than 700,000 New York customers and provide 2.2 million active New York customers $110 million worth of streaming services and premium channels for free for a limited time.
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Attorney General Barbara Underwood said it's believed to be the largest refund by an internet provider in U.S. history. It settles a consumer fraud action alleging that the state's largest internet service provider, which operated initially as Time Warner Cable and later under Charter's Spectrum brand name, denied the fast and reliable internet service customers were promised.
"This settlement should serve as a wake-up call to any company serving New York consumers: fulfill your promises, or pay the price," Underwood said in a statement.
Charter spokeswoman Lara Pritchard said the state's lawsuit stemmed from advertising practices by Time Warner Cable prior to its merger with Charter.
"Charter has made, and continues to make, substantial investments enhancing internet services across the state of New York since our 2016 merger, as acknowledged by the attorney general in this settlement," the company said in a statement.
Charter said it will contact eligible customers about compensation they will receive. Refunds of $75 will go to active subscribers who leased an inadequate modem or router or subscribed to a Time Warner legacy speed plan of 100 Mbps or higher. About 150,000 subscribers who had an inadequate modem for 24 months or more will get an additional $75.
The settlement is separate from a dispute between Charter and the state's Public Service Commission over the company's progress in meeting goals set by regulators in 2016 as a condition of the merger approval — especially an expansion of broadband to rural areas.
In July, the PSC revoked its approval of Charter's acquisition of Time Warner Cable's New York operations and ordered the company to come up with a plan to sell the Spectrum system to another provider. The two sides have been negotiating to come up with a compromise.
Stamford, Connecticut-based Charter serves 26 million customers in 41 states.