Frontier is accused of not delivering the internet speeds it sells to consumers.

The Federal Trade Commission, along with law enforcement agencies from six states, today sued Frontier Communications, alleging that the company did not provide many consumers with internet service at the speeds it promised them, and accepted customer orders for internet speed tiers the company had no intention of actually providing.

In the complaint, the FTC and its state partners allege that Frontier advertised and sold internet service in several plans, or tiers, based on download speed. Frontier has touted these tiers using a variety of methods, including mail and online ads, and has sold them to consumers over the phone and online.

In reality, the FTC alleges, Frontier did not provide many consumers with the maximum speeds they were promised and the speeds they actually received often fell far short of what was advertised.

“When Frontier sends mail to a consumer’s residential address, or displays digital advertisements to consumers with residential addresses known to Frontier, Frontier has access to information indicating that it is unable to provide certain of its DSL Internet speed tiers to some consumers, based on factors such as the address’s distance from Frontier’s networking equipment, which Frontier can easily compute or estimate for many addresses,” the complaint stated. “In numerous instances, Frontier has sent consumers advertisements for DSL Internet service at speed tiers that Frontier could not provide to them.”

In early 2019, a management consulting firm analyzed, at Frontier’s direction and with Frontier’s participation, Frontier’s proprietary network data and internal records for nearly 1.5 million then-current DSL subscribers. This analysis found that approximately 440,000 of Frontier’s DSL subscribers, or nearly 30% of the population analyzed, were “potentially” “oversold” on speed tiers that
exceeded the actual speeds Frontier provided to them.

Frontier is also accused of violating Wisconsin state law by making demonstrably false statements about its service reliability. Frontier’s advertisements represent to consumers that they can receive uninterrupted “crystal-clear” phone service with “99.9% reliability.” But the lawsuit claims Wisconsin consumers routinely suffer from sound quality issues with their service. For example, consumers have complained that they experience a buzzing or static sound that makes hearing the other caller very difficult, if not impossible. The suit also claims that between 2018 and 2019, Wisconsin customers endured over 200,000 landline outages, with over 25,000 left unrepaired after 24 hours.

The FTC’s complaint was filed with the attorneys general from Arizona, Indiana, Michigan, North Carolina, and Wisconsin, as well as the district attorneys’ offices of Los Angeles County and Riverside County on behalf of the State of California. The plaintiffs seek court costs and restitution for consumers affected by Frontier’s allegedly deceptive behavior.

The Commission vote authorizing the staff to file the complaint was 4-0. The complaint was filed in the U.S. District Court for the Central District of California.

Quibi is closing down its streaming service in the next several weeks, sources told the Wall Street Journal this afternoon, after spending $1.75 billion of investors’ money and attracting few subscribers and a lawsuit.

The service, founded by Hollywood mogul Jeffrey Katzenberg, never found a footing in the highly competitive streaming business, and has been plagued with problems since its April debut. Katzenberg envisioned the service as a home for short-form video entertainment — typically 5-10 minute chapters of professionally produced shows, designed to be watched by people on the go. Quibi was specifically developed for smartphone viewing, which meant producers had to create shows specifically for small screens. For technical reasons, Quibi was difficult to view in-home.

Katzenberg argued the service would fill a streaming niche for people looking for short video fixes instead of long form programming, arguing highly produced shows would attract a different audience than amateur short-form clips from services like YouTube.

Then the COVID-19 pandemic hit in March, forcing most would-be Quibi subscribers into home lockdown for school and work. It could not have come at a worse time for Quibi. Soon after debuting, scathing reviews about the quality of some Quibi productions were also published, further deterring would-be customers.

Quibi’s advertising partners, which included Pepsi and Walmart, were patient with the service, but after six months of low viewer numbers, many advertisers began deferring payments on their combined commitment of $150 million in advertising.

Also in early March, a patent infringement lawsuit over Quibi’s Turnstyle feature, which lets viewers watch video horizontally or vertically on their devices and rotate between those positions without disrupting the experience, was filed by Eko, which claimed it invented and patented the technology and saw its work stolen by Quibi employees. Although Quibi won a motion to limit the lawsuit, litigation was expected to continue in a California court.

Over the summer, media reports noted 90% of free trial subscribers canceled their subscription before charges began, revealing Quibi had just 72,000 paid subscribers willing to spend $4.99 a month, a fraction of the tens of millions of subscribers other streaming platforms have attracted.

The Journal reported on Wednesday that Quibi founder Jeffrey Katzenberg called investors to tell them he is shutting the service down. A restructuring firm hired to examine options for the streaming platform reportedly made several recommendations to Quibi’s board of directors, but it seems a complete shutdown was chosen as the best option.

NBCUniversal’s Peacock streaming service app is now finally available on Roku devices and Roku-enabled televisions, almost 10 weeks after the new streaming service launched.

Peacock’s appearance on Roku came after NBCUniversal and Roku reached a deal guaranteeing NBCU’s networks (and corresponding apps for 11 NBCU networks, 12 NBCU-owned local stations, and 23 Telemundo-owned local stations) will remain available on the Roku platform and in return, Roku will support Peacock. The deal was seen as crucial by analysts, because Roku has an installed user base of over 43 million accounts, with an estimated 100 million viewers in households across the country.

“We are pleased that NBC agreed to a very positive and mutually beneficial partnership to bring Peacock to America’s No. 1 streaming platform,” said Tedd Cittadine, Roku’s vice president of content acquisition. “We are excited by the opportunities to integrate NBC content within the Roku Channel while we also work together with Peacock on the development of a significant and meaningful advertising and ad tech partnership. This is a great outcome for consumers and we look forward to growing together with Peacock as they bring their incredible content to the Roku platform.”

Roku is also pleased whenever a significant content provider signs a deal with the company. Roku traditionally takes a 20% cut of all subscription revenue when a customer signs up for a service on the Roku platform. It receives at least 30% of the advertising time on free streaming services, allowing Roku to sell advertising and keep the money. NBCU appeared to be reluctant to accept those terms, and that is likely what caused the delay in debuting Peacock on Roku. Neither party would disclose the terms in the contract. Comcast is the parent company of NBCU.

Comcast CEO Brian Roberts said last week Peacock had signed up at least 15 million new users over the last two months. But Roberts would not disclose how many were actually paying for the service. Peacock’s free, ad-supported tier offers over 13,000 hours of classic and current NBC programs, including entertainment, news, and sports. A small catalog of original series and other premium content is also available for $4.99 a month (or $49.99/yr), and users who want it all — without ads — can pay $9.99 a month (or $99.99/yr). Roberts likely needs a much larger subscriber base to make Peacock a viable proposition, making its availability on the Roku platform crucial.

Some analysts fear carriage disputes like this could open a new front in the “retransmission consent” wars, where national and local networks are blacked out when cable or satellite providers refuse to pay their asking prices. If Roku insists on being compensated in return for making services available in its app store and if content providers cannot reach an agreement, services could suddenly disappear, or never appear at all. HBO Max is still unavailable on Roku because parent company AT&T has yet to sign a contract with Roku, and Peacock remains unavailable on Amazon’s Fire TV platform and Samsung’s Smart TVs.

How low can AT&T go? Customers retaining “unlimited data plans” that were discontinued in 2010 were throttled to as little as 127 kbps after using just 2 GB a month.

AT&T’s lawyers are asking a judge to accept media coverage exposing the company’s allegedly “secret” speed throttling policy for some of its wireless customers as a valid defense in a 2015 class action case that seeks to compensate some AT&T customers for misrepresenting its “unlimited data plan.”

AT&T last month asked the judge to have the long-running case thrown out, claiming AT&T well publicized its new speed throttling policy it imposed on a legacy unlimited data plan the wireless company stopped selling in 2010, but allowed existing customers to keep. By 2011, some customers still subscribed to the grandfathered unlimited plan started noticing data speeds plummeting to near dial-up if they used a lot of data. At first, AT&T appeared to impose a speed throttle on customers using over 10 GB of data per month, but by 2012, AT&T was accused of speed throttling unlimited customers after they used as little as 2 GB of data during a billing period.

The resulting class action lawsuit, filed in California, alleged that AT&T misrepresented its unlimited data plan as ‘unlimited,’ when in fact in practical terms it was not. The plaintiffs are seeking damages from AT&T to discourage the company from engaging in false advertising in the future, and to compensate customers that paid for an unlimited data plan that eventually became almost useless after customers used just over 2 GB a month.

AT&T’s defense partly relies on the company’s claim it extensively publicized changes to its legacy unlimited data plan as early as 2011, and the plaintiffs should have been aware of it. The Federal Communications Commission was aware of AT&T’s actions and just a month before the class action case was filed, the regulatory agency issued a notice of apparent liability to AT&T proposing a $100 million fine for unwarranted speed throttling.

AT&T’s attorneys have worked hard to stop the lawsuit over the last five years. In addition to claiming customers were notified of their excessive data usage through text messages and billing notices, AT&T last month sought to introduce a dozen media reports covering its speed throttling policy into the court record to convince U.S. District Judge Edward Milton Chen the plaintiffs don’t have a case and to get the lawsuit dismissed.

One of the news articles cited in AT&T’s May 14 filing was written by former DSL Reports’ author Karl Bode, who has been roundly critical of AT&T’s data caps for over a decade. Ironically, AT&T’s defense team is arguing Bode’s report, “AT&T Wages Quiet War on Grandfathered Unlimited Users” offers proof AT&T was not keeping its speed throttling policy “secret,” as at least one plaintiff claimed. Bode suggested AT&T had engineered its speed throttling plan to push grandfathered unlimited data plan customers off the plan in favor of more profitable plans offering a specified data allowance and overlimit fees.

Bode

“In other words, pay $30 for “unlimited” service where you’re actually only getting 2 GB of data before your phone becomes useless, or sign up for a 3 GB tier for the same price so you’re in line to get socked with the usage overages of tomorrow,” Bode wrote at the time.

His views have not changed in 2020.

“For nearly a decade AT&T has tap danced around the fact it misleadingly sold an ‘unlimited’ data plan packed with confusing limits. No amount of legal maneuvering can hide the fact that AT&T lied repeatedly to its customers about the kind of connection they were buying,” Bode told Stop the Cap! “Instead of owning its mistake, learning from it, and moving forward, AT&T’s now trying to point to critical news coverage from the era to falsely suggest consumers should have known better. It’s utterly nonsensical and speaks volumes about the lack of ethical leadership at a company that routinely sees some of the lowest customer satisfaction ratings in American industry.”

AT&T’s lawyers are not prepared to concede, however. Since the lawsuit was filed, AT&T’s legal team attempted to force the case into arbitration in 2016. That effort was successful until a 2017 California Supreme Court decision in another case gave the plaintiffs ammunition to claim that it was against California law to force consumers into arbitration. The Ninth Circuit court agreed, and the case reverted to district court, where AT&T immediately began efforts to have the case dismissed outright.

AT&T is not alone throttling so-called “heavy users” that have either legacy or current unlimited data plans. All major cellular companies enforce fine print policies that allow speed throttling after customers consume as little as 20 GB of wireless data during a billing cycle. The fact companies still advertise such plans as “unlimited” irks Bode.

“An unlimited data connection should come with no limits. If giant wireless carriers can’t respect the dictionary, they should stop using the word entirely,” Bode told us.

Windstream Communications lost between $3.2-5.1 million in lost profits because of a 2019 false advertising campaign run by Charter Communications in areas where the two companies compete for internet customers, claimed an expert witness in a court hearing to determine the damages Charter must pay.

In December, U.S. Bankruptcy Judge Robert Drain issued a summary judgment finding Charter responsible for sending out misleading advertising fliers that violated the federal Lanham Act and false advertising laws in place in some states.

“Shortly after Windstream filed for Chapter 11 protection, Charter commenced a false and misleading advertising campaign designed to cause irreparable injury and damage to Windstream’s reputation and business,” the original lawsuit filed with the U.S. Bankruptcy Court for the Southern District of New York stated. “Charter targeted Windstream customers in Alabama, Georgia, Kentucky, Ohio, Nebraska, and North Carolina, which are several of Windstream’s top performing states.”

“On the envelopes for the advertisement, Charter intentionally utilized Windstream’s trademark and signature color pattern to mislead Windstream customers into believing that the advertisement came directly from Windstream. Indeed, Charter’s advertisement stated that it was ‘Important Information Enclosed for Windstream Customers.’”

The offending Charter flier seems to suggest Windstream is going out of business.

A later investigation found Charter sent at least 800,000 mailers to customers in service areas where Windstream competes with Spectrum.

Jeffrey Auman, executive vice president of sales and marketing at Windstream Communications, told the court last week the false ads directly harmed Windstream’s reputation with its customers, with some left believing the phone company was ceasing operations because of its bankruptcy filing. Auman argued it was fair for Charter to pay damages covering Windstream’s legal expenses to file the lawsuit and cover its advertising and promotional expenses incurred to rebut the ads and retain customers.

A company-provided expert witness testified Windstream lost customers and between $3.2 and $5.1 million in lost profits. Spectrum’s ad campaign also created long term negative “fear, uncertainty, and doubt” about Windstream’s health and ability to service customers. The witness claimed Spectrum’s fliers ended a “growth streak” for the phone company and has caused new customer projections to fall behind.

“It was a big deal with us,” Aubrey testified. “Word of mouth in these small communities means a lot.”

Windstream told Judge Drain the company has spent more than $4.3 million on service credits, promotional retention discounts, and cost-free upgrades to keep customers happy.

Charter has countered Windstream’s customer losses come from its inferior technology, which makes Windstream’s speeds slower and less competitive. Spectrum has upgraded internet customers in the midwest and parts of the southern U.S. to up to 200 Mbps for its Standard internet plan, which is much faster than what Windstream offers many of its DSL internet customers.