New York Takes Tough Line on Misleading Broadband ISP Speeds

The UK advertising watchdog is currently deciding on new guidelines for improving how broadband speeds are advertised by ISPs (here and here). While we wait for that it’s worth casting your eyes across the Atlantic towards New York, where the issue is about to take centre stage in a heated legal battle.

In short, the Attorney General for New York City, Eric Schneiderman, has launched a lawsuit (here) against Spectrum-Time Warner Cable and Charter Communications. The lawsuit accuses them of conducting a “systematic scheme to defraud and mislead subscribers to its Internet service by promising to deliver Internet service that it knew it could not and would not deliver.”

Extract from the Summons Document

Spectrum-TWC fraudulently induced at least 640,000 subscribers in New York State to sign up for high-speed plans that it knew it could not provide. Spectrum-TWC knowingly failed to allocate sufficient bandwidth to subscribers, which it could have done either by reducing the size of its service groups or adding more channels to each service group.

Based on several Internet speed tests, including those run by the FCC, subscribers on the 300 Mbps plan generally received only 10% to 70% of the promised speed; subscribers on the 200 Mbps plan received only 14% to 60% of the promised speed; and subscribers on the 100 Mbps plan received only 24% to 87% of the promised speed.

The Attorney General also alleges that the ISPs “inflated the average speed results by providing increased Internet speeds when service groups were less utilized to offset (and conceal) test results showing slower speeds when the service groups had heavier usage.”

On top of that customers were similarly told “they would achieve Internet speeds wirelessly that were as fast as their wired speeds. In reality, however, wireless speeds were consistently much slower than wired speeds due to multiple factors, including distance from the wireless router, interference from other electronics and appliances, and the number of devices accessing the wireless router at the same time.”

The case is interesting for a number of reasons, not least because of how it challenges the well-established residential model for broadband delivery and the reality of how various factors can impact performance, often in ways that are not easy for any ISP to predict.

In fairness ISPs should always be cautious about what they promise and saying that a WiFi router will deliver the same speed as an end-users ultrafast wired connection is certainly very unwise. WiFi performance is highly variable and gets slower with distance, not to mention while passing through obstructions like doors and walls etc. There’s also no way to guarantee that the receiving adapter(s) would work at the top speed.

Broadband providers typically face another significant challenge when establishing an economically viable model for residential connections. Generally speaking ISPs adopt a “Best Efforts” approach where their capacity is shared between many users in order to keep the service affordable, but even under ideal circumstances this can sometimes result in performance dropping off during busy peak periods.

However if ISPs were to offer un-contended links with dedicated capacity to every home then your monthly fee might suffer an astronomical hike. Forget paying £10-£30 per month for unlimited broadband, instead the price from some ISPs would be closer to £100 or possibly more, depending upon the service speed and connection technology.

Attorney General Schneiderman said (here):

“The allegations in today’s lawsuit confirm what millions of New Yorkers have long suspected — Spectrum-Time Warner Cable has been ripping you off. Today’s action seeks to bring much-needed relief to the millions of New Yorkers we allege have been getting cheated by Spectrum-Time Warner Cable for far too long. Even now, Spectrum-Time Warner Cable continues to offer Internet speeds that we found they cannot reliably deliver.”

Sadly we’re not intimately familiar with the broadband ISP market in New York and so it’s difficult to pass judgement, although the documents do allege that ISPs were making some fairly unrealistic claims. By comparison most broadband ISPs in the UK tend to attach a lot of caveats to what they promise and also offer personalised speed estimates, which is required by existing regulation from Ofcom and the Advertising Standards Authority (ASA).

We’re anticipating more changes to the UK market during 2017 and so a case like the one that has begun in New York seems very unlikely to occur over this side of the ocean. Never the less it will be fascinating to see how the lawsuit plays out over the coming months. Thanks to Carl for spotting this.