The Internet speeds advertised by various service providers mean very little to the average consumer.
People understand what it means for a car to go 0-60 miles per hour in a certain amount of time, and they have at least a mental concept of fast versus slow. When it comes the the speeds sold by ISPs, however, most people aren't really able to distinguish between 50 megabits per second and 300Mbps. They can tell if a web page loads faster, or a video plays without any buffering, but the terms, for many, are fairly meaningless.
This all gets even more confusing when companies advertise their Internet products using words with no legal definition. "Fast" is a concept, and it conveys a certain meaning, but it's not actually a legal standard. That makes it especially hard for most people who buy Internet service to know if they're getting what they pay for.
And, it turns out that they may not be. New York state attorney general's office has sent letters to Verizon, Time Warner Cable (NYSE:TWC), and Cablevision (NYSE:CVC) charging that the three companies are not always providing customers service at the advertised and/or contracted speeds, Ars Technica reported.
What is being alleged, here?
The AG's office suggested in its letters to Verizon, Time Warner Cable, and Cablevision, all of which were published on the Ars Technica website, that interconnection may be part of the problem. No evidence was provided to back up the assertion that the three companies weren't delivering promised speeds, nor was an specific interconnection issue mentioned.
All three letters were specific to the company mentioned, but all contained language similar to what was said in the Verizon letter:
"This Office is concerned that, for reasons substantially within Verizon's control, consumers may not be experiencing the speeds advertised," Senior Enforcement Counsel Tim Wu wrote. "In particular, we are concerned that those paying for premium options, for various reasons mainly related to interconnection arrangements, may not be experiencing proportional increases in experienced speeds."
Notice that the words "may not" were used multiple times. The New York AG's office is not actually charging the three ISPs with anything. It's basically saying that it thinks the companies are doing something wrong, and if they are, they should knock it off or face penalties including fines, consumer restitution, and court costs.
All three companies were asked to respond to the allegations and a lengthy list of things the AG's office thinks the company might be doing wrong.
It's pretty clear from the statement made by Attorney General Eric Schneiderman that he thinks all three companies may be guilty as alleged.
"New Yorkers deserve the Internet speeds they pay for. But, it turns out, many of us may be paying for one thing, and getting another," Attorney General Eric Schneiderman said in the statement.
Verizon, Comcast, and Cablevision all pledged in separate statements reported on by Reuters to work with the AG's office to resolve the matter. And, of course, all three claimed to the news service in varying fashions to not be guilty of the alleged wrongdoings.
Why does this matter?
The New York Attorney General's office often leads the way for other states to follow. In this case, while no specific evidence has been presented against the three companies, the AG's office did cite a 2014 study by 2014 study by the Measurement Lab Consortium, which found that interconnection did create "performance degradation" for consumers.
That survey was part of the reason for the New York AG's investigation, according to Reuters. Its findings suggest that even if it's not an intentional act by the three companies, there likely is an real problem, here.
If that proves to be true -- and all three companies have agreed to investigate -- it could set a precedent for voluntary compliance across the country. New York is being aggressive, but it's also being pretty nice. All three companies are essentially getting a chance to clean up their acts (assuming speeds actually are slower than advertised) before any legal action is taken.
It's very possible this investigation could lead to consumers all over the country eventually getting the Internet they pay for.
Daniel Kline has no position in any stocks mentioned. He has never been investigated by the New York State Attorney General. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.