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Internet provider faces settlement, layoffs

POSTED: February 26, 2014 4:00 a.m.

The Governor's Office of Consumer Protection announced Monday that the agency has entered into a $600,000 settlement with Internet service provider Windstream Communications over allegations of false advertising.

The office claims that Windstream advertised speeds it could not provide, mislead customers as to the nature of their infrastructure, misrepresented minimum connection speeds and failed to completely clarify subscription-based promotions.

Windstream is an Internet provider in many rural areas of Georgia where there are limited options for Internet service, including Dawson County.

"Windstream is committed to advertising its services in an ethical manner that adheres to legal and industry standards, and it has cooperated fully throughout the inquiry by Georgia's Office of Consumer Protection," said Scott Morris, senior adviser with corporate affairs with Windstream.

According to the GOCP, Windstream advertised that it would provide certain Internet speeds to its customers that it could not provide 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.

"This is essentially a truth in advertising case," said John Sours, administrator of the Governor's Office of Consumer Protection. "What consumers thought they were getting from a major company was significantly different from what they allegedly received."

Windstream claims that it is in the process of investing about $14 million to upgrade its fiber-supported areas in Georgia. The company said 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.

"Windstream has had a 200 percent increase in the last two years, and the number of devices connected to the Internet has grown exponentially," Morris said in a previous interview.

An estimated $600,000 of the $14 million was spent to improve the network in the Dawsonville exchange, according to Morris.

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.

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 restitution to be used for the purchase of new computer equipment for the Technical College System of Georgia.

"Windstream is pleased to resolve this inquiry by entering an assurance of voluntary compliance with all applicable advertising laws," Morris said. "That agreement includes no finding or admission of violation by the company."

Windstream has also recently reduced its employee workforce nationwide.

The company plans to eliminate about 400 positions by March 3.

"There's no connection between the layoffs and the agreement with the Office of Consumer Protection," Morris said.

 

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