LEGAL NEWS: Georgia ISP Windstream Communications to pay $600K in False Advertising Case

By Phil W. Hudson, Atlanta Business Chronicle, 2/28/2014

Internet service provider Windstream Communications Inc. entered into a $600,000 settlement on Feb. 24 over allegations of false advertising.

Little Rock, Ark.-based Windstream provides Internet service to residential consumers and businesses, many of whom are located in rural parts of Georgia, where they have very limited options for Internet service, the Governor’s Office of Consumer Protection (GOCP) said.

“This is essentially a truth in advertising case,” said John Sours, administrator of the GOCP, in a statement. “What consumers thought they were getting from a major company was significantly different from what they allegedly received.

GOCP alleges that:

  • Windstream advertised that it would provide certain Internet speeds to its customers that it could not provide and/or guarantee, particularly for Georgia consumers whose network equipment is supported by copper-fed wires.
  • When customers called Windstream to complain about their slow Internet speeds, Windstream representatives allegedly misrepresented the time frame within which the customers’ Internet speed issues would be resolved, or, in the case of customers whose equipment is supported by copper-fed wires, failed to tell customers that it was unable to resolve the issue.
  • Some of Windstream’s “Lifetime Price Guarantee bundle” advertisements falsely implied that the advertised offer included high-speed Internet packages with speeds of “up to 12 Mbps”.
  • Windstream also allegedly advertised a free 6-month “Hulu Plus” subscription but did not clearly disclose that consumers who failed to cancel the subscription at or before the 6-month period would be charged membership fees every month thereafter, until the membership was cancelled.

In resolution of these allegations, Windstream will pay a total of $600,000, which includes a $175,000 civil penalty, $175,000 in administrative fees and expenses, and $250,000 in cy pres restitution to be used for the purchase of new computer equipment for the Technical College System of Georgia, the Office of the Governor said.

According to the Governor’s office, Windstream told the GOCP that it is in the process of investing approximately $14 million to upgrade its fiber-supported areas in Georgia. The company says that 90 percent or more of these upgrades were completed by the end of 2013, with the remaining upgrades slated for completion by mid-2014. The company expects the upgrades to address systemic download speed issues in the areas undergoing the upgrades. It is also seeking federal funding as well as exploring other options for upgrading the Internet service for consumers who are served by network equipment supported by copper-fed wires.