A.G. Underwood Announces Settlements Establishing Industry-Wide Standards For Marketing Internet Speeds
News from the New York Attorney General's Office
FOR IMMEDIATE RELEASE
December 22, 2018
Attorney General's Office Press Office / 212-416-8060
A.G. UNDERWOOD ANNOUNCES SETTLEMENTS ESTABLISHING INDUSTRY-WIDE STANDARDS FOR MARKETING INTERNET SPEEDS
Following Precedent-Setting Deal with Charter Communications, Other Major New York Internet Service Providers—Altice, Frontier, RCN, and Verizon—Agree to Reform Speed-Related Marketing and Business Practices
NEW YORK — Attorney General Barbara D. Underwood announced today that four major New York State internet service providers (“ISPs”)—Altice, Frontier, RCN, and Verizon—have entered into agreements that transform how the broadband industry in New York State markets internet speeds. The advertising prohibitions and requirements follow the model set in the Attorney General’s precedent-setting consumer fraud settlement with Charter Communications, announced on Tuesday. Along with Charter, the ISPs entering into agreements today provide service to the vast majority of New York internet subscribers.
The agreements require the ISPs to market internet speeds as “wired,” to substantiate their speed claims with regular speed testing, and to warn consumers that “wireless speeds may vary.” The ISPs must also spell out the relative benefits of speeds and services accurately, ensure that there is sufficient network capacity to deliver advertised content from third party providers, like Netflix, and undertake other reforms designed to improve internet service and make marketing clearer and more accurate.
As more specifically addressed below, today’s agreements also include direct financial commitments by the ISPs to improve network infrastructure and compensate for the harm to certain consumers.
“For years, internet providers marketed ever increasing internet speeds, regardless of whether they could actually deliver. No more. The agreements announced today require internet providers to live up to a basic standard: if you promise services, you better deliver. These reforms establish a new model for how to fairly market internet services to consumers in New York State and around the country,” said Attorney General Underwood.
The agreements are the result of a series of investigations of ISPs across the industry, which uncovered significant failures in how ISPs market and deliver internet speeds. The major New York ISPs often failed to maintain sufficient network capacity to deliver on their speed promises, equipped subscribers with modems and wireless routers that did not reliably deliver the speeds subscribers had paid for under normal conditions, and implied, falsely, that subscribers were likely to access the advertised speeds wirelessly.
The severe misconduct of Charter Communications required an enforcement action. Today’s agreements address the failings of other ISPs, and are designed to avoid more serious issues in the future. Any ISP that fails to adhere to the basic rules articulated in the agreements could face legal consequences.
Broadband Industry Reforms
The following represents the key injunctive terms common across the agreements:
1) Affirmative Advertising Obligations: ISPs are 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.
2) Substantiating Internet Speeds: ISPs must substantiate internet speeds using an industry-accepted testing methodology, and discontinue any speed plan that cannot be substantiated.
3) Advertising prohibitions: ISPs are 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.
ISPs are 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) Sales and Customer Service Training: ISPs must train customer service representatives and other employees to inform subscribers about the factors that affect internet speeds. Altice, RCN, and Verizon must also maintain a video on their websites to educate subscribers about various factors limiting internet speeds over WiFi.
5) Equipment Reforms: Altice, RCN, and Verizon are 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.
Specific Terms for Other ISPs
Frontier: Frontier communications is required to spend no less than an additional $25 million to upgrade its network infrastructure upstate to relieve congestion and improve service. Frontier also agreed to a series of specific requirements, including the obligation to advertise speeds as a range and to refund half the future fees paid by any customer who is not capable of receiving 100% of the speed they were told they would get.
Altice: Altice is required to provide restitution of $5 million to subscribers to compensate for the company’s failure to supply adequate modems and routers, and to reliably deliver premium speed tiers.
The Altice, RCN, and Verizon investigations were handled by Assistant Attorneys General Mihir Kshirsagar and Marc Montgomery of the Bureau of Internet & Technology, Assistant Attorney General Kate Matuschak of the Consumer Frauds Bureau, and Senior Advisor and Special Counsel Simon Brandler of the Executive Division. The Frontier investigation was handled by Assistant Attorney General Kate Matuschak of the Consumer Frauds Bureau, Assistant Attorney General Mihir Kshirsagar and Johanna Skrzypczyk of the Bureau of Internet & Technology, and Benjamin Bruce of the Rochester Regional Bureau. The investigations were supervised by Bureau of Internet & Technology Chief Kim Berger, Executive Deputy Attorney General Manisha M. Sheth of the Division of Economic Justice, Chief Deputy Attorney General Janet Sabel, and Chief of Staff and Deputy Attorney General Brian Mahanna.
Director Jonathan Werberg and Deputy Director Megan Thorsfeldt of the Research and Analytics Department, and Chief Economist Peter Malaspina, provided invaluable technical and analytic assistance.