NY AG Could Be Broadband-Speed Mythbuster

New York Attorney General Eric Schneiderman has launched an investigation into Verizon, Cablevision and Time Warner Cable, according to multiple reports that surfaced Monday. The purpose of the probe is to determine whether three of the state’s top telecom companies are providing high-speed broadband Internet as advertised to consumers and businesses.

The AG last week sent the chief executives of the companies letters seeking documents and answers to specific questions about whether there is a divergence between the advertised speeds for broadband Internet and the actual speeds delivered to customers, particularly at the higher end.

Pointed Questions

The probe was launched in response to consumer complaints on the issue, Doug Cohen, a spokesperson for the attorney general, told the E-Commerce Times.

“New Yorkers deserve the Internet speeds they pay for,” Schneiderman said, “but, it turns out, many of us may be paying for one thing and getting another.

That is why Schneiderman’s office sent the letters to the major cable and Internet providers in New York asking for additional information and documentation on the claims the firms make and the actual speeds they provide to customers.

“Families pay a huge cost already for Internet access in New York, so I will not tolerate a situation in which they aren’t getting what they have been promised,” added Schneiderman.

Among the specific concerns the AG raised is whether there is a difference between the actual broadband speed on the “last mile” between the broadband customer and the fiber-optic cable head-end. The AG also wants to know whether the providers and other networks are engaged in any interconnection disputes that might cause a divergence between the advertised speed and the actual speed provided.

Full Cooperation

All three targeted companies expressed confidence they would be able to resolve the matter.

“Optimum Online consistently surpasses advertised broadband speeds, including in FCC and internal tests. We are happy to provide any necessary information to the Attorney General as we do our customers,” a Cablevision spokesperson said in a statement provided to the E-Commerce Times by Sarah Chaikin, VP of media relations.

“We’re confident that we provide our customers the speeds and services we promise them and look forward to working with the AG to resolve this matter,” Time Warner Cable said in a statement spokesperson Judy Barbao sent to the E-Commerce Times.

“Verizon is confident in the robust and reliable Internet speeds it delivers to subscribers,” said John Bonomo, a spokesperson for Verizon. “We look forward to working cooperatively with the Attorney General’s office.”

Escape Hatch

“We’ll have to wait and see what happens with this,” said wireless industry analyst Jeff Kagan. “In the worst case scenario, if this proves to be true it will be embarrassing to the companies.”

Most ISPs have trouble actually maintaining their advertised speeds, he said, as they often are marketing the best- case scenario as the speed that customers should expect.

“I know customers don’t like this, but what choice do we have?” asked Kagan.

The investigation more than likely will find that ISPs are falling a bit short of what they promise, said Kevin Krewell, principal analyst at Tirias Research.

“I’m pretty sure that the NY AG will find that customers rarely, if ever, get the full advertised speeds they are paying for,” he told the E-Commerce Times. “There are so many technical details that are required to be just right in order to receive the full modem speed that it’s rarely possible for the provider to deliver on the sales promise.”

As long as telecom companies are allowed to advertise “up-to” speeds, they will have an escape hatch to wiggle out of liability, said community broadband consultant Craig Settles.

“We consumers know this, regulators know this, and service providers bank on it — that the system is rigged in favor of the providers,” he told the E-Commerce Times. “This is one of the reasons why programs such as the broadband stimulus or FCC programs have trouble delivering broadband to communities.”

David Jones is a freelance writer based in Essex County, New Jersey. He has written for Reuters, Bloomberg, Crain's New York Business and The New York Times.

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