New York sues Charter, alleges Time Warner fraud on internet speeds

By Jonathan Stempel and Anjali Athavaley

NEW YORK (Reuters) - New York filed a lawsuit on Wednesday accusing Charter Communications Inc of short-changing customers who were promised faster internet speeds than it could deliver.

The lawsuit in State Supreme Court in Manhattan accused Charter's Spectrum unit, until recently known as Time Warner Cable, of systematically defrauding customers since 2012 by promising and charging for services it knew it could not offer.

At least 640,000 subscribers signed up for high-speed plans but got slower speeds, and many subscribers were unable to access promised online content such as Facebook, Netflix, YouTube and various gaming platforms, the complaint said.

The lawsuit seeks "full restitution" for customers, as well as hefty civil fines.

In a press conference, New York Attorney General Eric Schneiderman said his office filed the lawsuit after fielding thousands of complaints from unhappy customers.

"The allegations in today's lawsuits confirm what many of you have long suspected," he said. "Spectrum-Time Warner has been ripping you off."

Charter bought Time Warner Cable last year.

In a statement, Charter said it was disappointed that the attorney general challenged Time Warner Cable's broadband speed advertisements that predated the merger.

"We will continue to invest in our business and deliver the highest quality services to our customers while we defend against these allegations involving Time Warner Cable practices," the Stamford, Connecticut-based company said.

Among the allegations in the complaint was an accusation that Time Warner Cable leased older-generation modems to 900,000 subscribers knowing that the modems could not achieve faster internet speeds.

Schneiderman had in October launched a probe into whether three major internet providers were shortchanging consumers.

The others included Verizon Communications Inc and Cablevision Systems Corp, now owned by European telecom group Altice NV.

(Reporting by Anjali Athavaley and Jonathan Stempel in New York; Editing by Tom Brown)