On Wednesday, EarthLink filed a complaint against Charter Communications that alleged Charter is attempting to steal its broadband subscribers.
EarthLink said in its complaint to the Supreme Court of the State of New York that Charter purposely set out to mislead EarthLink subscribers in order to get them to switch to its broadband service.
A spokesperson for Charter declined to comment at this time on the filing.
EarthLink said Charter has falsely informed EarthLink customers that EarthLink is out of business, and that Charter has "taken over" EarthLink, as well as EarthLink's broadband service wasn't available in markets where it was.
"These false statements have reduced connectivity options for customers when they need them most, damaged EarthLink’s reputation and brand, and directly resulted in lost customers," EarthLink said in its complaint.
As one of the conditions of Time Warner's merger with AOL, which at that time was one of the largest ISPs in the nation, 20 years ago, EarthLink entered into an agreement with Time Warner that allowed it sell its branded broadband service over Time Warner's cable network. That "high-speed service agreement" remained in place when Charter bought Time Warner Cable in 2016.
Under terms of the agreement, both parties agreed to not target the other's internet subscribers.
Four years ago, Windstream bought EarthLink's network assets for $1.1 billion. In 2017, Charter elected to terminate the agreement with EarthLink, which meant the latter could no longer add new subscribers. Based on a section of the agreement, the two parties have been operating under a "transition period" whereby "existing service subscribers—currently approximately 50,000 in number—are eligible to continue to receive EarthLink High-Speed Service until October 31, 2020." As a result of Charter's actions, EarthLink said the 50,000 customers could lose access to their personal email accounts.
"EarthLink recently uncovered evidence that Charter has not complied with the terms of the Agreement," EarthLink said in its complaint. "Specifically, in an attempt to convince customers to switch to Spectrum, Charter has secretly been using its call centers to target EarthLink’s Service Subscribers and affirmatively mislead them about EarthLink and its service."
EarthLink and Charter did engage in negotiations in regards to the 50,000 subscribers, most of which are in New York with large clusters in California and the Carolinas, but were unable to come to terms.
"Rather than engage in these negotiations in good faith, Charter has attempted to exploit its dominant market position to achieve an unfair advantage," EarthLink said in its filing.
EarthLink said it has paid Charter and Time Warner "several million dollars," including $150 million over the last five years alone, to use Charter's cable network and to compensate Charter for handling the billing and service issues. While Charter handles the billing for the broadband services, EarthLink maintains its own relationship with customers that are using its email service.
“Charter is engaged in a campaign of deception with the purpose of misleading consumers about their internet options," EarthLink said in its complaint. "Charter has spread false rumors about the financial health of EarthLink in order to grow its customer base and eliminate competition, ultimately enabling Charter to increase prices in the future.
"Charter’s efforts have reduced service accessibility and increased consumer costs during the midst of a global pandemic, when the budgets of middle-class families are already being stretched to their limits. Access to affordable, reliable and high-speed Internet is an economic lifeline for millions of Americans who are working or learning from home and are unable to access traditional office spaces or classrooms."
EarthLink also provided statements from its subscribers that said Charter employees told them EarthLink was no longer in business and Charter's Spectrum service had taken over EarthLink. Subscribers also said that Charter had switched over to Spectrum broadband with out their authorization.
"These statements were and are false, tend to injure EarthLink in its business, and were made to EarthLink’s customers," EarthLink said in its complaint. "Charter knew the statements were false at the time its employees made them, and/or Charter acted with reckless disregard as to their truth or falsity."
Shades of Windstream?
EarthLink also brought up Charter's dust-up with Windstream in its filing. In May of last year, a federal judge in the U.S. Bankruptcy Court in the Southern District of New York ruled that Charter Communications had to pay for letters that were sent to Windstream subscribers saying that an advertisement sent to them by Charter "was untrue and improper."
A preliminary injunction was filed that outlined the steps that Charter needed to take to remedy an advertising campaign that said Windstream, which filed for Chapter 11 bankruptcy protection in February of 2019, was going out of business.
On April 5 of last year, Windstream filed a federal lawsuit against Charter that said Charter was engaging in a "scare-tactic campaign" to entice Windstream subscribers to switch over to Charter.
Among other issues, Windstream said in its filing that Charter, which filed for its own bankruptcy protection back in 2009, used envelopes that had Windstream's trademark and company colors to imply that it would not be able to provide services to its subscribers and that it was going to liquidate its assets.