A.G. Underwood Announces Record $174.2 Million Consumer Fraud Settlement With Charter For Defrauding Internet Subscribers

Settlement Includes Largest-Ever Consumer Payout by Internet Service Provider in U.S. History

As Part of Settlement, Charter Required to Implement Major Precedent-Setting Marketing and Business Practice Reforms; Charter has also Made Substantial Network Enhancements Following AG Investigation

NY Consumers to Receive $62.5 Million in Direct Refunds, Plus Over $100 Million in Premium Channels and Streaming Services  

  Attorney General Barbara D. Underwood announced a record $174.2 million consumer fraud settlement with Charter Communications, Inc. and Spectrum Management Holding Company (together “Charter”) for defrauding internet subscribers. The $62.5 million in direct refunds to consumers alone are believed to represent the largest-ever payout to consumers by an internet service provider (ISP) in U.S. history.

The landmark agreement settles a consumer fraud action alleging that the state’s largest ISP, which operated initially as Time Warner Cable and later under Charter’s Spectrum brand name, denied customers the reliable and fast internet service it had promised. This is the first settlement to result from the Attorney General’s major investigation of broadband internet service in New York.

“This settlement should serve as a wakeup call to any company serving New York consumers: fulfill your promises, or pay the price,” said Attorney General Underwood. “Not only is this the largest-ever consumer payout by an internet service provider, returning tens of millions of dollars to New Yorkers who were ripped off and providing additional streaming and premium channels as restitution – but it also sets a new standard for how internet providers should fairly market their services.”

The settlement includes direct restitution of $62.5 million for over 700,000 active subscribers, who will each receive between $75 and $150, as well as streaming services and premium channels, with a retail value of over $100 million, at no charge for approximately 2.2 million active subscribers.

Additionally, under the settlement, Charter is required to implement a series of precedent-setting marketing and business reforms, including the requirement to describe internet speeds as “wired” and to substantiate them through regular speed testing. These reforms set the stage for major marketing and business reforms across the broadband industry. Following the Attorney General’s investigation, Charter has also made substantial network enhancements to improve its internet service in New York.

Attorney General’s Lawsuit 

In 2017, the Attorney General’s office filed a detailed complaint in New York State Supreme Court, alleging that Charter had failed to deliver the internet speed or reliability it had promised subscribers in several respects. That includes leasing deficient modems and wireless routers to subscribers – equipment that did not deliver the internet speeds they had paid for; aggressively marketing, and charging more for, headline download speeds of 100, 200, and 300 Mbps while failing to maintain enough network capacity to reliably deliver those speeds to subscribers; guaranteeing that subscribers would enjoy seamless access to their chosen internet content while engaging in hardball tactics with Netflix and other popular third-party content providers that, at various times, ensured that subscribers would suffer through frozen screens, extended buffering, and reduced picture quality; and representing internet speeds as equally available, whether connecting over a wired or WiFi connection – even though, in real-world use, internet speeds are routinely slower via WiFi connection.

The Attorney General’s office prevailed at every major stage of the court proceedings. After Charter sought to move the case to federal court, the Attorney General’s office won a federal court decision returning it to state court. Charter then moved to dismiss the action on various grounds, including federal preemption; the Attorney General’s office successfully opposed that motion, which the trial court denied in full. When Charter appealed parts of that ruling, the Attorney General’s office prevailed again at the Appellate Division. 

Record Settlement Agreement 

As part of today’s settlement, Charter agrees to a financial settlement of $62.5 million in refunds plus streaming services and premium channels to subscribers with a retail value of over $100 million. The direct customer refunds alone are believed to constitute the largest consumer relief payout ever paid by an ISP in U.S. history. The direct restitution serves to compensate subscribers who Charter equipped with outdated modems and routers and with premium speed plans that consistently failed to deliver the advertised speeds. The streaming benefits serve to compensate subscribers for Charter’s historic failures to faithfully deliver third-party internet content that it had advertised.

Charter is also required to implement a series of precedent-setting marketing and business reforms, establishing a new model for the broadband industry.

The key financial terms of the agreement and the marketing and business reforms are set out below.

Financial Terms

1) Consumer Relief (Direct Refunds): $62.5 million

a. Charter to award a $75 refund to each of over 700,000 active subscribers based on: 

(1) Leasing an inadequate modem; 

(2) Leasing an inadequate WiFi router; OR

(3) Subscribing to a Time Warner Cable legacy speed plan of 100 Mbps or higher.

b. Charter to award an additional $75 refund to each of over approximately 150,000 subscribers who had an inadequate modem for 24 months or more.

Charter will notify subscribers of their eligibility for refunds and disburse them within 120 days. 

Note: Charter has already disbursed over $6 million in refunds for inadequate modems to date, separate from today’s settlement. Because these subscribers received full compensation, they are ineligible for a further payment. 

2) Consumer Relief (In-Kind Video and Streaming Benefit): Worth over $100 million

In addition to the direct refunds detailed above, Charter will offer free streaming services to approximately 2.2 million active internet subscribers:

a. Charter will offer all subscribers currently receiving internet and cable television from the company a choice of either three free months of HBO or six free months of Showtime. (Note: This benefit is available to subscribers who do not already subscribe to both of the offered networks through Charter.)

b. All other active Charter internet subscribers will receive a free month of Charter’s Spectrum TV Choice streaming service—in which subscribers can access broadcast television and a choice of 10 pay TV networks—as well as a free month of Showtime.

Charter will notify subscribers of their eligibility for video and streaming services and provide details for accessing them within 120 days of the settlement.

Receiving the video and streaming services as restitution will not affect eligibility for future promotional pricing.

3) Substantial Network Investments

Following the Attorney General’s investigation, Charter made significant investments to address the problems identified in the complaint and improve internet service in New York. This includes network enhancements, modem replacements, and upgraded WiFi routers.

Marketing and Business Reforms

The settlement also includes the follow key injunctive terms:

1) Affirmative Advertising Obligations: Charter is required to (a) describe internet speeds as “wired”; (b) disclose that wireless speeds may vary; and (c) disclose the factors that might lead actual experience to vary, including based on the number of users and device limitations. This applies to all advertising and marketing of speeds, including television and other commercials, website and website communications, print ads, bill inserts, emails, and more.

2) Substantiating Internet Speeds: Charter must substantiate internet speeds using an industry-accepted testing methodology, and discontinue any speed plan that cannot be substantiated.

3) Advertising prohibitions: Charter is prohibited from making unsubstantiated claims about (a) the speed required for particular internet activities like streaming; (b) the reliability of the internet service (e.g., no buffering, no slowdowns); or (c) the availability of the promised speed over WiFi.

Charter is also prohibited from describing internet speeds as “consistent” without fully satisfying the FCC Consistent Speed Metric and must make commercially reasonable efforts to deliver access to all online content and services featured in its advertisements. 

4) Equipment Reforms: Charter is required to: (a) provide subscribers with equipment capable of delivering the advertised speed under typical network conditions when they commence service; (b) promptly offer to ship or install free replacements to all subscribers with inadequate equipment via at least three different contact methods; and (c) implement rules to prevent subscribers from initiating or upgrading service without proper equipment for the chosen speed tiers. 

5) Sales and Customer Service Training: Charter must train customer service representations and other employees to inform subscribers about the factors that affect internet speeds. Charter must also maintain a video on its website to educate subscribers about various factors limiting internet speeds over WiFi.

A.G. Underwood And DOI Commissioner Garnett Announce Arrest Of DEP Inspector Who Accepted Bribes From Asbestos Abatement Contractor

Defendant Allegedly Accepted Cash Bribes in Exchange for Benefits to Contractor, Jeopardizing New Yorkers’ Health and Safety 

  New York Attorney General Barbara D. Underwood and New York City Department of Investigation (DOI) Commissioner Margaret Garnett announced the arrest of Samuel Nebedum, 66, an Inspector with the New York City Department of Environmental Protection (DEP), on charges of Bribe Receiving in the Second Degree, a Class C felony, and Official Misconduct, an A misdemeanor. If convicted of the class C felony, the defendant faces up to fifteen years in state prison.

Nebedum allegedly engaged in a long-term bribery relationship with an asbestos abatement contractor, wherein he accepted cash bribes, meals, and fish in exchange for providing various benefits to the contractor, including intentionally overlooking violations at the contractor’s worksites and the referral of additional abatement business. The joint Attorney General and DOI investigation revealed that this arrangement has allegedly gone on for over ten years and put the health and safety of workers and New York City residents at risk.

“As we allege, the defendant abused his position by shamelessly accepting bribes – not only violating the public trust, but also jeopardizing New Yorkers’ health and safety,” said Attorney General Underwood. “New Yorkers rely on public servants to do their jobs and keep us safe, and my office has not hesitated to take on those who breach this most fundamental duty.” 

DOI Commissioner Garnett said, “For nearly 10 years this City Inspector allegedly cashed in his integrity, disregarding serious safety concerns in exchange for thousands of dollars in bribes, expensive fresh-caught fish, and free meals. This defendant had a duty to protect workers and the public; instead, according to the charges, he put their health at risk, failing to stop the dangerous and improper removal of asbestos. DOI and its partners, including the New York State Attorney General and the DEP, have sought to protect workers and New Yorkers across the City from hazardous and illegal asbestos abatement and removal and will continue to pursue public employees whose violation of the law endangers the community.”

According to the felony complaint filed today in Queens County Supreme Court, Nebedum has been an Inspector with the DEP since May 29, 1990, and during the course of his employment allegedly accepted over $10,000.00 in bribes from a contractor during that time. The complaint alleges that in exchange for these bribes, Nebedum used his position as an Inspector to give advance notice prior to official DEP inspections taking place at this contractor’s jobsites, ignored asbestos removal violations at this contractor’s jobsites, and referred additional business to the contractor, which stemmed from his official jobsite visits, all in violation of DEP policy.

The DEP is the primary City agency responsible for the regulation of the asbestos abatement industry. Proper abatement procedures involve requiring all workers at a jobsite to wear Personal Protective Equipment, which includes a protective mask and hazmat suit; wetting down all asbestos containing material (“ACM”) when removed, so as to prevent asbestos from becoming airborne; the setting up of a proper decontamination unit with proper air-monitoring equipment, to ensure the work area does not have air containing ACM escaping; and the dumping of materials containing ACM at designated disposal facilities. As set forth in the felony complaint, the Attorney General and DOI allege that Nebedum ignored these regulations during the course of this bribery scheme, putting the health of many workers and City residents at risk for inhaling and ingesting asbestos. Asbestos is a naturally occurring mineral that is hazardous to human health and is known to cause a type of cancer known as mesothelioma.

Nebedum was arraigned today in Queens Criminal Court before the Honorable Judge Jerry Iannece and released on his own recognizance. The case was adjourned to January 11, 2019.

The charges are merely accusations and the defendant is presumed innocent unless and until proven guilty in a court of law.

Attorney General Underwood and DOI Commissioner Garnett would like to thank the New York City Department of Environmental Protection for their assistance during this investigation. Attorney General Underwood and DOI Commissioner Garnett also would also like to thank the New York State Department of Environmental Conservation’s (DEC) Bureau of Environmental Crimes Investigation for their support.

FIVE YOUTHS INDICTED FOR FELONY ASSAULTS ON NYC DEPARTMENT OF CORRECTION OFFICERS AT HORIZON JUVENILE CENTER

A Sixth Is Charged with Obstructing Governmental Administration

 Bronx District Attorney Darcel D. Clark today announced that five youths have been indicted in four assaults on NYC Department of Correction Officers at Horizon Juvenile Center in the Bronx during October 2018, after they were transferred there from Rikers Island. 

 District Attorney Clark said, “The defendants, while incarcerated at Horizon Juvenile Center, allegedly attacked Correction Officers during four separate incidents. In one incident, an officer’s nose was fractured and in another, an officer was punched, lost consciousness and suffered a concussion. Violence will not be tolerated in any jail or detention facility.” 

 District Attorney Clark said the defendants were arraigned today before Bronx Supreme Court Justice Robert Neary. They were charged with varying degrees of Assault in four indictments. Three defendants are charged with Attempted Gang Assault in the first degree; if convicted they could face up to 15 years in prison.

 The defendants are due back in court in February and March 2019.

 According to an indictment, on October 3, 2018, defendant Zahkari Bennett, 17, allegedly struck an officer numerous times with a closed fist, causing him to lose consciousness and fall, hitting his head and body on a table and chair. Bennett is charged with second-degree and thirddegree Assault and Obstructing Governmental Administration.

 According to an indictment, on October 4, 2018, defendant Jaheem Ware, 17, allegedly picked up a garbage can and attempted to throw it inside a housing area, but officers stopped him. As they were restraining Ware, defendant Rennie Patterson, 17, came up behind an officer and allegedly punched him in the head twice. Patterson is charged with second-degree and thirddegree Assault and second-degree Obstructing Governmental Administration. Ware is charged with second-degree Obstructing Governmental Administration and third-degree Menacing.

 According to an indictment, on October 27, 2018, defendants Juneal Jackson, 18, Alfred Burns, 17 and Rennie Patterson, 17, allegedly punched an officer multiple times, and then broke broom handles and struck the officer with them. They are charged with Attempted Gang Assault first-degree, second degree and third-degree Assault, and second-degree Obstructing Governmental Administration.

 According to an indictment, on October 7, 2018, Jayquon Coleman, 18, allegedly threw a Correction Staff radio in the face of an officer, causing a displaced fracture of the officer’s nose. He is charged with second-degree and third-degree Assault and second-degree Obstructing governmental Administration.

 District Attorney Clark thanked the DOC’s Correction Intelligence Bureau and Correction Investigator Timothy Fries for their assistance in the investigation.

Fernandez - Biaggi Support the Community For More Police Protection After A Woman Was Attacked

  Standing on the corner of White Plains Road and Lydig Avenue residents of the area along with Assemblywoman Nathalia Fernandez and Senator Alessandra Biaggi called for more police protection after a woman was attacked on nearby Cruger Avenue. 

  

Above - Assemblywoman Nathalia Fernandez calls for more police protection after a woman was attacked in the area. Assemblywoman Fernandez who lives not to far from the attack said that women in my community should not have to walk in fear of being attacked. 

Below - Newly elected State Senator Alessandra Biaggi reads from a prepared statement about the incident. 

Captain Andrew Natiw (file photo) commanding officer of the 49th Precinct was at the scene, and told me that while the 49th precinct will be given six new officers in January there will be no net gain of officers since six officers have left the precinct. Captain Natiw added that there will be a few Argus Cameras installed in the area that are funded by Councilman Mark Gjonaj  sometime next year. He added that all Bronx precincts are doing the best jobs they can with the resources they have. 

BIAGGI RESPONDS TO CUOMO'S DEC. 17 SPEECH

  State Senator-elect Alessandra Biaggi (District 34, Bronx/Westchester) issued the following response to Governor Cuomo's Dec. 17 speech:

"I will join the Governor in working to pass laws to protect women's right to choose and access to contraceptives, to legalize marijuana, to fully fund the MTA, to strengthen gun control laws, to increase access to voting, to pass the Dream Act and other protections for immigrants, to protect our climate by reducing carbon use and I hope much more. 

"Making sure our schools are fully funded is a fundamental responsibility of the State. We need smaller classes, more programs for English language learners, summer school and after school programs. These all cost money and our children are worth the investment.  Funding the foundation aid formula is the remedy our schools need. Our job is to figure out what it will take to make sure every school in New York is an excellent school and every child in every zip code is offered an excellent education, and then deliver nothing short of that."

Councilman Ruben Diaz Sr. Christmas Toy Giveaway

  Councilman Ruben Diaz Sr. not only brought Santa to Soundview Tuesday afternoon to give toys away to local children, but also the person who helps sponsor the toy giveaway New York State Republican Party Chairman Ed Cox. This has become a annual event for Councilman Ruben Diaz Sr. going back to when he was in the State Senate where Diaz Sr. was one of the 'Four Amigos'.

  

Above and Below - Four children were called up to the stage and asked questions about the history of Christmas. If the child answered the question correctly they received a crisp ten dollar bill from Councilman Diaz Sr. All four children answered their questions correctly.

Above - The crowded auditorium at IS 133.

Below - Councilman Diaz Sr. brings up the first row of children to meet Santa, and choose their present.

Above - Once on the stage the children get a greeting from Santa.

Below - Then one of Santa's helpers gets the toy for the child.

Assemblymember Nathalia Fernandez - You're Invited to My Inauguration Ceremony

  

Dear Friends and Neighbors, I hope this holiday season is treating you well. As many of you already know, I was successfully elected into the New York State Assembly this past April during a special election. After five very successful and wonderful months in office, I was re-elected in November during the state wide elections. I want to thank everyone for their overwhelming support. My community continues to instill their confidence in me and I would not have been able to get this far without your help. However, because I initially came into office half-way through the year, I was not able to hold an inauguration -- I went straight to work instead! As such, I am proud to announce that I will officially be holding my community-wide inauguration ceremony on Saturday, January 5th at the Jacobi Medical Center Rotunda. This is a very special moment for me, marking years of hard work and support from everyone. Therefore, I would like you all to attend. The ceremony will begin at 12 pm. Everyone who would like to attend - and I do hope there are a lot of you - will have to RSVP at this link: tinyurl.com/y9j4stq8 Once again, I thank you all for your support throughout the last few months. If you have any questions, please call my office at (718) 409-0109. I hope to see you at my inauguration! Best Regards, Assemblywoman Nathalia Fernandez 80th Assembly District

Attachments area

Governor Cuomo Delivers Address on Agenda for First 100 Days

Governor Andrew Cuomo Gave a fifty minute speech before the New York Bar Association in Manhattan outlining his twenty-point agenda to be passed by the state legislature now that the Democrats now control both the State Assembly and the State Senate. To some this appeared to be a preview of the State of the State Address to be given by the governor in 2019.

The 20-point agenda includes:

Ensure a Progressive Tax System: While the federal government prioritizes tax cuts for corporations and the wealthy, Governor Cuomo believes in a just, progressive tax system that taxes its citizens based on their ability to pay. The Governor will maintain the state's progressive income tax with a millionaire's tax, while permanently capping regressive local property taxes at 2%.

Cut Middle Class Taxes while Fighting to repeal SALT: The federal government's cap on state and local tax (SALT) deductions was a devastating and targeted assault on New York that has increased taxes on New Yorkers and reduced home values. Governor Cuomo will continue to lead the fight to repeal the cap on SALT while in New York continuing tax cuts for middle class families. 

Protect Quality, Affordable Health Care: While the federal government and radical judges continue to roll back the Affordable Care Act and tear away health care from millions of Americans, Governor Cuomo will take action to make sure New Yorkers are protected. The Governor will work to codify the health exchange into law and pass a law to ensure pre-existing conditions continue to be covered by insurance companies regardless of what happens at the federal level.

Codify Reproductive Rights: In the face of the federal assault on women's reproductive rights, including a Supreme Court that threatens to roll back Roe v. Wade, Governor Cuomo will fight to pass the Reproductive Health Act and the Comprehensive Contraceptive Coverage Act within the first 30 days of the new session.

Enshrine Gender Equality into Law: Nearly a century after it was first proposed, New York State has still not passed the Equal Rights Amendment to protect against discrimination on the basis of sex in our State constitution. To right this decades-old wrong, Governor Cuomo will push to pass the Equal Rights Amendment to add sex as a protected class.

Combat Gun Violence: 2018 was by far the worst year for school shootings in American history. To once again lead the nation on gun safety, Governor Cuomo will push to pass the Red Flag Law, ban bump stocks and extend the waiting period for purchasing a gun from three days to 10 days.

Launch a $150 Billion Infrastructure Plan: While the federal government fails to make progress on an infrastructure plan, Governor Cuomo will expand on New York's nation-leading $100 billion infrastructure plan — building new airports, bridges and train stations all across the state — by investing an additional $150 billion in our infrastructure that will create hundreds of thousands of jobs. 

Fund and Restructure the MTA While Easing Traffic in New York City's Business District: After decades of neglect and diffused responsibility, the MTA is in dire need of funding and reorganization. Governor Cuomo will fix the MTA by passing congestion pricing and overhauling the outdated structure of the authority in order to build a reliable, state of the art mass transit system with a steady funding stream and a structure that supports operational excellence.

Ensure Education Equity: After requiring data on how local schools distribute funds in last year's budget, it's clear that poorer schools too often do not receive an equitable share of funding from their school districts. Governor Cuomo will fight for an education system where districts distribute funding based on need and fairness to ensure that every child receives a quality education.

Pass the Dream Act: While the federal government has declared war on new immigrants, New York is standing up for our immigrant communities. This year, New York will pass the Dream Act once and for all to ensure a higher education system that opens the door of opportunity to all of our children.

Launch the Green New Deal: The federal government still denies climate change, remarkably turning a blind eye to their own government's scientific report. New York will be the most progressive state in the nation in moving to renewables and growing the new sustainable green economy. The Green New Deal will make New York's electricity 100% carbon neutral by 2040 and put the state on the path to eliminating its carbon footprint. 

Ensure Clean, Safe Drinking Water for All: Industrial toxins have infiltrated many of our communities' drinking water systems, but the federal Environmental Protection Agency has been slow to test and regulate chemicals and to regulate pollution. Governor Cuomo will invest in our water infrastructure and clean our water for our children and our children's children.

Improve Our Democracy: To continue New York's progressive path of justice for all, Governor Cuomo will protect our democracy to make sure our government truly represents the people. While the federal government works to disenfranchise voters, Governor Cuomo will encourage citizens to engage in the democratic process by allowing voting by mail, enacting early voting, instituting same day and automatic voter registration, synchronizing federal and state elections and make Election Day a State Holiday to ensure as many people as possible participate in the democratic process.

Increase Trust in the Democratic System: To ensure our government is for the people, by the people, Governor Cuomo will close the LLC loophole, ban corporate campaign contributions, overhaul our campaign finance system and end outside income for lawmakers.

Protect Public Sector Unions: While the federal government is waging an all-out attack on the labor movement in both the public and private sector and seeks to undermine the right to organize and collective bargaining, Governor Cuomo believes that the labor movement is a force for social justice and the middle class. The Governor will expand the Janus protections to cover public sector labor unions at the local level and ensure workers have labor rights in the gig economy.

Keep Housing Affordable for New Yorkers: The lack of affordable housing is a crisis across the state and nation. While the federal government has abandoned its constitutional and moral responsibility dictated by the 1949 Housing Act, under Governor Cuomo's leadership New York will invest more in affordable housing than ever before. Governor Cuomo will reform rent regulations, including ending vacancy decontrol, repealing preferential rent and limiting capital improvement charges to protect affordable housing and respect tenants' rights.

Pass the Child Victims Act: Governor Cuomo will fight to ensure our society holds those who abuse our children accountable criminally and civilly by passing the Child Victims Act once and for all.

Protect LGBTQ Rights: New York was the first large state to pass marriage equality, but as the federal government still seeks to discriminate against the LGBTQ community, Governor Cuomo will codify the Gender Expression Non-Discrimination Act into New York State law and end conversion therapy.

Legalize Adult Use of Recreational Marijuana: Governor Cuomo will end the disproportionate criminalization of one race over another by regulating, legalizing and taxing adult use of recreational marijuana.

Ensure Fairness in the Criminal Justice System: Governor Cuomo will work to address injustice in the criminal justice system by ending cash bail and enacting speedy trial and discovery reforms.