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Court Says Charter Suit Not Preempted by FCC Transparency Rules

The New York State Supreme Court's appellate division has cleared the way for the state to continue pursuing a lawsuit against Charter Communications over broadband speed claims.

The appellate court ruled that the FCC's 2015 Open Internet Order's transparency rules did not give the commission the power to preempt the state's lawsuit and said the state's claims are actionable. The ruling affirmed another appellate judge's rejection of Charter's argument that the state's claims in a lawsuit "based on allegations of false promises about broadband speeds involve an irreconcilable conflict between federal and state law that requires a finding of preemption."

“This is great news for broadband users in New York, and it bodes well for state efforts to protect broadband users generally," said John Bergmayer, senior counsel at Public Knowledge. "Such efforts are especially important given the current FCC’s decision to abdicate many of its consumer protection responsibilities with respect to broadband.”

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Charter had appealed the judge's decision that the FCC doesn't have the authority to preempt state laws and that Charter's speed claims are actionable.

Former New York State Attorney general Eric Schneiderman had filed a complaint alleging that Time Warner Cable (which Charter acquired) "promised to provide broadband speeds it knew it could not deliver and mischaracterized the reliability of access to certain online content."

Charter countered, in seeking to dismiss the complaint, that the allegations were preempted by the 2015 Open Internet Order's Transparency Rule and other FCC guidance, and that the state had failed to cite a legitimate cause of action because the FCC's speed test showed that TWC was "clearly capable of providing — and often did provide — the broadband speeds it advertised, and its 'up to' representations thus could not have misled a reasonable consumer."

Charter also argued that other claims in TWC's ads were subjective "non-actionable puffery," which is actually a legal term for a promotional "exaggeration" that consumers aren't supposed to take seriously.

On Feb. 16, the court denied Charter's motion to dismiss, saying that while some of the claims were puffery, others were not and were actionable. It also found that the FCC can't preempt state law, which the FCC has asserted it can in its recent Restoring Internet Freedom rollback of the 2015 Open Internet Order rules.