OOPSTime Warner gamed the FCC AskSam testing. The multibillion dollar New York State suit against Charter/Time Warner revealed details about how they delivered false results to the FCC tests, in a manner reminiscent of the $20B Mercedes-Benz emissions fraud. Hundreds of thousands of customers were overcharged $20, $30, and $40/per month, often for several years. Because TWC blocked interconnections with companies like Netflix, millions of customers did not get the Internet connection TWC promised and advertised.A 20% refund to those customers adds up to $billions. 

That I got this wrong is not nearly as interesting as the story itself, but I'm putting my correction first. My frequent comments about U.S. cable systems generally delivering promised speeds or close. I hope the other cablecos, especially Comcast, were more honorable.

Time Warner sold 50, 200, and 300 megabit service to hundreds of thousands of customers they knew had D2 modems that couldn't deliver the speeds. That's just simple fraud and they collected $hundreds of millions. A team of lawyers worked through an massive pile of subpoenaed documents and discovered smoking gun after smoking gun.

The Attorney-General's suit used Time Warner's own data to show customers often got 30%, 75% and even 90% less than the speeds they were charged for. They also found definitive proof that TWC actively refused to accept data like Netflix streams in order to force Netflix, Cogent, and others to pay Time Warner or be effectively cut off from millions of customers.

 

TWC told the FCC all the old D2 modems would be replaced and customers would get the promised speeds. Instead, over the strong recommendations of their own engineers, they left hundreds of thousands in the field that couldn't come close to the speed customers were charged for. The Attorney-General got over 2,000 consumer complaints.

I apologize to readers for reporting that the cable slowdown problems were exaggerated. I'd also like to apologize to Tim Wu, Craig Sessions, and David Belson for suggesting their claims of cable problems did not correspond to the data.

The suit begins with some modest material. But halfway through they start introducing what they found in the documents and it becomes devastating. There's much more to this story, including the first major use of false advertising/fraud claims to penalize companies who knowingly don't provide what they are selling. Here's part of the content listing:

Spectrum-TWC Misled Subscribers By Falsely Promising Speeds It Knew It Could
Not Deliver........................................................................................................................ 18
A. Spectrum-TWC Promised Subscribers They Would Receive The Fast Internet
Speeds Advertised In Their Service Plans .................................................................... 19
B. Spectrum-TWC Leased To Subscribers Deficient Equipment That Was Not
Capable Of Delivering The Promised Speeds .............................................................. 24
1. Spectrum-TWC Leased Older-Generation, Single-Channel Modems To
Subscribers ................................................................................................................ 25
a. In Its Effort To Cut Costs And Boost Profits, Spectrum-TWC Did Not
Replace Deficient Modems ................................................................................... 28
2. Spectrum-TWC Leased Deficient Wireless Routers To Subscribers ............. 35
C. Spectrum-TWC’s Network Could Not Consistently Deliver Promised Speeds .... 37
1. Spectrum-TWC Did Not Allocate Sufficient Resources For Its Network To
Reliably Deliver The Promised Speeds .................................................................... 37
2. Speed Tests Confirmed That Spectrum-TWC’s Network Did Not Reliably
Deliver Promised Speeds .......................................................................................... 41
3. Spectrum-TWC Manipulated The FCC’s Speed Tests ................................... 45
D. Spectrum-TWC Misled Subscribers By Promising Wireless Speeds That It Knew
It Could Not Deliver ..................................................................................................... 47
II. Spectrum-TWC Misled Subscribers By Promising Reliable Access To Online
Content That It Chose Not to Deliver ............................................................................... 52
FILED: NEW YORK COUNTY CLERK 02/01/2017 12:05 AM INDEX NO. 450318/2017
NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 02/01/2017
4 of 87
A. Spectrum-TWC Represented That Subscribers Would Get Reliable Access To
Online Content .............................................................................................................. 53
B. Spectrum-TWC’s Failure To Add Port Capacity Deprived Its Subscribers Of
Reliable Access To Online Content .............................................................................. 57
C. Spectrum-TWC Promised Reliable Access To Online Content That It Intentionally
Failed To Deliver In A Bid To Extract Fees From Backbone and Content Providers 

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The news, July 21, 2017

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