L.A. County DA announces $18.8 million settlement with Time Warner Cable over internet speeds

LOS ANGELES (KABC) -- The Los Angeles County District Attorney's Office said on Thursday that a $18.8 million settlement was reached with Time Warner Cable on behalf of more than 170,000 consumers throughout the state who paid for internet speeds they did not receive.

The majority of the money, about $16.9 million, will be returned to consumers through automatic credits on their monthly cable and/or internet bills from Spectrum, the parent company of Time Warner Cable.

The L.A. County District Attorney's office said it is the largest direct restitution order ever secured by its office in a consumer protection lawsuit.

The lawsuit, which was filed by the district attorneys of Los Angeles, Riverside and San Diego counties in Los Angeles County Superior Court, alleged unlawful business practices.

Prosecutors accused Time Warner Cable, beginning in 2013, of using misleading advertising practices to lure consumers to pay for high-speed internet services the company could not deliver.

The company did not admit or deny fault under the settlement.

The L.A. District Attorney's Office said some customers were issued outdated modems, making it impossible for them to receive the higher bandwidth they purchased. Others paid for higher internet speeds that Time Warner's infrastructure could not deliver. They are eligible to receive approximately $90 in a one-time credit on their cable/internet bills. A few consumers who both were issued outdated modems and paid for higher internet speeds will be eligible to receive approximately $180 in credit. Spectrum must automatically issue credits to all eligible consumers within 60 days.

In addition, Time Warner Cable internet customers in California will be offered one of two free services. Those who are cable TV subscribers will be offered three free months of Showtime, if they do not already subscribe to Showtime, valued at $45. Customers with only internet services will be offered one free month of an entertainment streaming package, Spectrum Choice, valued at approximately $40. The total value of these free service offers will depend on how many people sign up.

Time Warner Cable also agreed to pay $1.9 million in litigation costs -- split evenly three ways -- to the prosecuting agencies under the settlement.

According to the L.A. District Attorney's Office, as a result of the lawsuit, Time Warner Cable also agreed to a prohibition on advertising internet speeds it knows or should know it cannot consistently deliver during peak hours. The company also is required to ensure that its customers are issued equipment that can actually deliver advertised speeds.

Time Warner Cable issued a statement on Thursday, which said:

"We are pleased to have reached this settlement with California regarding certain Time Warner Cable advertising practices in California prior to our 2016 merger. We cooperated fully in the review, have resolved this matter comprehensively, and this is expressly not a finding nor an admission of liability. Charter has made and continues to make, substantial investments enhancing internet service across the state including raising entry-level speeds of our flagship service to 200Mbps and launching Spectrum Internet Gig. We look forward to continue providing the best Internet, TV, Mobile and Voice products and services to our California customers."