Time Warner Cable sued by New York on behalf of League of Legends, Netflix customers

New York’s attorney general Eric T. Schneiderman says that Time Warner Cable defrauded consumers by providing internet service that was much slower than advertised. Moreover, he maintains that the company neglected to upgrade its own services at the same time it was negotiating new contracts with both Netflix and Riot Games. It also claims the company worked in secret to confuse the Federal Communications Commission (FCC).

Schneiderman is seeking damages on behalf of hundreds of thousands of consumers who experienced poor performance generally, and specifically with regard to Netflix streaming services and Riot’s flagship League of Legends game.

In a scathing, 87-page complaint released on Feb. 1, Schneiderman maintains that the internet service provider is still engaged in “fraudulent and deceptive practices.” The matter is complicated by the fact that TWC merged with Charter Communications, a deal that cost a reported $65 billion and created the nation’s second largest cable provider. That ISP is now known as Charter Spectrum.

The claim hinges on data from both Netflix and Riot Games.

The claim is noteworthy in that it hinges on data from both Netflix and Riot, as well as studies conducted by the FCC and Spectrum’s own internal documents. Schneiderman provides a good summary in a press release, which is absolutely worth your time.

There are several parallel pieces to the complaint, which spans from Jan. 2012 until now. First, Schneiderman maintains that Spectrum leased internet modems and wireless routers that it knew were incapable of providing the advertised speeds. Consumer connections were deficient at a rate that was inversely proportional to the pricing tier, meaning that the more you paid Spectrum the less value you received for your internet subscription.

“When connecting wirelessly,” Schneiderman writes, “subscribers on the 300 Mbps plan typically received 15% of the promised speed; subscribers on the 200 Mbps plan received 20% of the promised speed; subscribers on the 100 Mbps plan received 39% of the promised speed; and subscribers on the 50 Mbps plan received 58% of the promised speed.”

To use the analogy of a public water main, Spectrum promised customers gallons of water and then knowingly leased them a faucet that was only able to produce drops at a time.

But Schneiderman goes further. He states that Spectrum also refused to upgrade the water main itself during a period of heavy demand. It did so in order to negotiate higher fees with the owners of the water source — in this case Netflix and Riot Games — as well as the owner of the larger water system, internet backbone provider Cogent.

“[Spectrum] deliberately took advantage of its control over port capacity where its network connected to online content providers to extract more revenue for the company,” states Schneiderman’s complaint. “To do so, [Spectrum] used its leverage over access to subscribers to extract fees from online content providers in exchange for granting such access.”

Once Netflix and Riot agreed to pay Spectrum, performance improved.

Once Netflix and Riot Games agreed to pay Spectrum for access to its customers, performance improved. Meanwhile, it took the FCC’s Open Internet Order to solve the issues between Spectrum and Cogent.

“[Spectrum] lined its pockets by intentionally creating bottlenecks in its connections with online content providers, despite knowing that these negotiating tactics would create problems for its subscribers in accessing online content.”

As proof of its fraudulent business practices, Schneiderman points to a specific program by the FCC to install monitoring hardware inside Spectrum customer’s homes. The devices used commonly available online services, like Speedtest.net, to keep tabs on the quality of consumer internet connections. When a portion of those tests reflected negatively on Spectrum, the OAG claims the company boosted only those customer’s connections in a direct attempt to fool the FCC.

Internal Spectrum documents quoted by Schneiderman refer to the solution as putting “lipstick on a pig.”

Schneiderman concludes by calling on Spectrum to “produce an accounting” and “disgorge all monies resulting from the fraudulent and illegal practices alleged.” In addition, it is asking for a series of civil penalty of ranging from $2,000 to $5,000 for each violation of New York law.

Polygon has reached out to Riot Games and the FCC for comment.

New York Magazine published a lengthy feature story on the attorney general’s complaint just a few days ago. When they reached out to Charter for comment, they appeared to want to put the actions of their recently acquired cable company behind them.

“We are disappointed that the New York Attorney General chose to file this lawsuit regarding Time Warner Cable’s broadband speed advertisements that occurred prior to Charter’s merger,” said the spokesperson. “Charter made significant commitments to New York State as part of our merger with Time Warner Cable in areas of network investment, broadband deployment and offerings, customer service, and jobs.”

Netflix declined to comment on this story.

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