Charter Alleges NY AG Conspired With "Cabal" to Bring Netflix-Throttling Lawsuit

New York State Attorney General Eric Schneiderman Serious - Getty - H 2018
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Tim Wu is a hero to many who worry that telecoms might take advantage of being the gatekeepers of online traffic. In 2003, the Columbia Law School professor coined the phrase "network neutrality," eventually leading the Federal Communications Commission to enact tough measures stopping ISPs from blocking and throttling online content. He's now in the cross-hairs of a case that has become significantly more important since the FCC voted in December to repeal net neutrality rules.  This week, Charter Communications alleged a conspiracy, with Wu playing a lead role.

The New York state attorney general, which up until recently was Eric Schneiderman and now is Barbara Underwood, is suing Charter. The complaint alleges that the company's Spectrum-TWC service promised internet speeds it knew couldn't be delivered and that Spectrum-TWC also misled subscribers by promising reliable access to Netflix, and online content and games.

In February, a New York state judge rejected Charter's bid to dismiss the case upon the argument that the FCC's net neutrality repeal preempted the lawsuit. The judge noted how the FCC in the "Restoring Internet Freedom Order" allowed states to "play their vital role in protecting consumers from fraud."

The judge's decision pushed the case into the discovery phase — and now, the company is pursuing a provocative defense and is demanding access to Wu's personal emails.

According to filings in the case, Wu played an active role and advised the NY AG well before the lawsuit was filed in February 2017. Charter alleges something nefarious.

In a letter to the judge Tuesday, Latham & Watkins attorney Christopher Clark, representing the defendant, explained the unclean-hands defense it wishes to raise against New York.

"Charter's unclean-hands defense is that Plaintiff actively conspired with private parties through Tim Wu (a leading critic of ISP business practices) to investigate and sue Time Warner Cable Inc.," he wrote. "Thus, Plaintiff delegated what should have been an objective law enforcement investigation to third parties whose pecuniary and political interests are adverse to TWC's, and who had preconceived notions of how and why to penalize TWC."

The letter then goes on to talk about documents produced by the other side that allegedly show how Wu and third parties "manufacture[d] fraud claims" and how his "co-conspirators boasted of having orchestrated Mr. Wu's work."

The names of the individuals who allegedly were in cahoots with Wu include Google's Meredith Whittaker, who in a 2015 email to a colleague, discussed having gotten off the phone with Wu about the NY AG consumer protection complaint and how it would frame interconnection as a consumer harm issue. (More about the issue of interconnection here).

Whittaker wrote, "This is all really confidential, obvs, but you're in the cabal."

She may have been joking, but Charter is taking the notion of a "cabal" seriously, also pointing to communications with several individuals at the New America Foundation, a Washington, D.C.-based think tank. Other comments that Charter is seizing upon: "Shit just got real," "Tell him [Wu] should talk to me too," and "We will need to be able to answer NYS AG questions, because we have no[t] been forthcoming to that office about the political implications of this matter."

Charter says that the state attorney general is resisting discovery demands and ignoring what it characterizes as "substantial constitutional interests."

"First, due process forbids Plaintiff from allowing politically and economically motivated private parties to control its exercise of prosecutorial powers against Charter," writes Clark in his letter. "Second, Plaintiff is unconstitutionally seeking to penalize truthful speech and to substitute in the [redacted] preferred speech in its place. The FCC determined that its required Transparency Rule disclosures (to which advertisements also must conform) 'prevent consumer deception,' and that is why such compelled speech is constitutional."

Charter demands meeting notes from the supposed "cabal," and says what it has gotten so far in redacted form suggest the participation of others, including Netflix.

If the importance of net neutrality stems from how those in position to influence the internet could abuse their authority, Charter appears to be pursuing a defense that flips the equation — suggesting that net neutrality advocates are using their political influence to corrupt law enforcement.

A spokesperson for the NY AG's office denies the allegation of conspiracy, responding, "Cute but desperate ploy to distract people from their years-long fraud and deception."