Charter Communications has agreed to pay $174.2 million to settle an action brought in 2017 by the New York Attorney General's Office that alleged the cable and internet company promised customers internet speeds that it couldn't deliver.

The settlement includes the largest-ever payout to consumers by an internet service provider in U.S. history, according to a statement from the office of New York Attorney General Barbara Underwood. The accord calls for $62.5 million in direct refunds to more than 700,000 subscribers in New York.

Charter, which is based in Stamford, Connecticut, has also agreed to offer customers more than $100 million in temporary access to premium channels and streaming services as part of the settlement. The company will also make future investments to improve internet service and speeds in New York, including network enhancements and new modems and routers for customers.

Underwood said in a statement that the settlement should set a precedent for any other ISP or company that attempts to misrepresent its services to customers in New York.

“This settlement should serve as a wake-up call to any company serving New York consumers: fulfill your promises, or pay the price,” Underwood said. “Not only is this the largest-ever consumer payout by an internet service provider, returning tens of millions of dollars to New Yorkers who were ripped off and providing additional streaming and premium channels as restitution—but it also sets a new standard for how internet providers should fairly market their services.”

The litigation is separate from the state's lawsuit filed earlier this year by the state Public Service Commission, which sought to effectively kick Charter out of the state for allegedly failing to meet its promised targets to expand high-speed internet service to rural areas.

The settlement announced Tuesday may be a bellwether for a resolution in that litigation sometime soon. Filings in that case show the state recently approved another extension for Charter to apply for a rehearing on the matter before the PSC while talks of a resolution continue. Maureen Helmer, a partner at Barclay Damon in Albany, New York, who is representing Charter in the lawsuit, wrote in a filing last week that those discussions are ongoing.

“Settlement discussions, as described in Charter's and the Department's joint November 21, 2018 letter to the Commission, remain ongoing, and, accordingly, there is good cause to further extend the deadlines so as to allow these discussions to continue,” Helmer wrote.

That could mean Charter will pay millions more to the state than it already committed to customers in Tuesday's settlement. A spokesman for the PSC confirmed that, as of Tuesday, a settlement had not been reached in the case and said the agency will continue to hold the company accountable for any failure to meet its obligations.

“The PSC has repeatedly expressed concerns about Charter's conduct as reflected in our public filings and today's settlement only reinforces that fact,” said James Denn, spokesman for the PSC. “These claims are independent from Charter's failure to meet its obligations to expand broadband services across the state, which is why the Public Service Commission will continue holding the company accountable for that failure.”

It wouldn't be the first time the company paid to settle complaints over its failure to expand internet access statewide. Charter paid regulators $13 million last June to settle the same complaint from the PSC, which approved the company's merger with Time Warner Cable in 2016.

The settlement announced on Tuesday was born from a lawsuit first brought in February 2017 by former Attorney General Eric Schneiderman. The case was led by several attorneys within the bureaus of antitrust, consumer fraud, and internet and technology.

Charter was represented by Christopher Clark, a partner at Latham & Watkins in Manhattan. Jason Burt, who is counsel at the firm, was also on the case. Neither attorney immediately returned a request for comment on the settlement.

A spokeswoman for Charter said in a statement that the company is happy to put the litigation to rest.

“We are pleased to have reached a settlement with the Attorney General on the issue of certain Time Warner Cable advertising practices in New York prior to our merger, and to have put this litigation behind us,” the spokesman said. “Charter has made, and continues to make, substantial investments enhancing internet service across the state of New York since our 2016 merger, as acknowledged by the Attorney General in this settlement.”

The spokeswoman also said the company is looking forward to continuing to provide internet, cable and telecommunications services to customers across the state.

If the company continues to operate in New York, it will have to implement a number of marketing business reforms to correct the errors that caused the litigation originally. The company will have to be clear in its advertising, for example, that internet speeds may vary, and will have to explain why they may vary based on the number of users and devices in a home.

The company will also be prohibited from advertising unsubstantiated claims about the speed required for internet activities, such as streaming, and will not be allowed to represent the reliability or availability of its internet services. Charter will also have to provide customers with equipment, such as modems and routers, that can produce the internet speeds they purchased.

Customers who may be eligible to receive a refund or free access to premium services from the company don't have to do anything to respond to the settlement as of now. Charter will be responsible for communicating directly with them about the payout if they are to receive one.

Customers who are deemed eligible for a refund will receive at least $75 from the company based on whether it leased them an inadequate modem or router, or if they subscribed to a Time Warner Cable legacy internet speed plan of 100 Mbps or higher. Customers who had an inadequate modem for two years or longer will receive an additional $75. Those refunds are expected sometime in the next four months.

The company will also offer free streaming services to approximately 2.2 million active internet subscribers, who can choose to receive either three months of HBO or six months of Showtime if they also receive cable. All other internet subscribers could be eligible to receive a free month of the company's streaming service with a limited number of channels and a free month of the Showtime premium channel.

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