Corrected - Time Warner Cable suffers major outage; New York launches probe

By Jim Finkle, Marina Lopes and Alina Selyukh

BOSTON/WASHINGTON (Reuters) - (Corrects 12th paragraph to clarify that 59 percent of Time Warner Cable customers, not all cable customers, are unsatisfied with service; corrects capitalization in analyst company to "cg42" from "CG42")

Time Warner Cable Inc, the No. 2 U.S. cable operator, suffered a massive network outage on Wednesday due to suspected human error that cut Internet services to some 11 million businesses and residences, prompting a New York state investigation.

The outage to all of its Internet customers across 29 states began at about 4:30 a.m. EDT (0830 GMT), said company spokesman Bobby Amirshahi. Services were restored by 7.30 a.m, he said.

The outage came at a critical time for Time Warner, which is working to win FCC approval of a $45 billion proposed merger with Comcast Corp, the largest U.S. cable provider as market experts say that customers are frustrated by the frequency and handling of previously disclosed service disruptions.

The company blamed a technical glitch for bringing down the network. It said an "erroneous configuration" had been inserted when technicians conducted routine, overnight maintenance on its Internet backbone.

"A failure of this size is very serious and we are taking the necessary steps to improve our processes with the objective of making sure this doesn’t happen again," Amirshahi said.

The outage affected 2 percent of all U.S. Internet networks, according to Renesys, a firm that monitors global Internet activity.

New York Governor Andrew Cuomo ordered the state's Department of Public Service to investigate the disruption as it reviews the company's planned merger with Comcast.

“Dependable Internet service is a vital link in our daily lives and telecommunications companies have a responsibility to deliver reliable service to their customers,” Cuomo said in a statement.

“We apologize for the early morning disruption in service and we intend to discuss any of the governor’s concerns with him as well as the many consumer merits of our merger,” Amirshahi said.

Such wide-scale outages are rare in the United States, said Jim Cowie, chief scientist with Renesys' parent DYN.

The outage came one day after the company agreed to pay $1.1 million to U.S. regulators who found it did not properly disclose multiple network outages last year, highlighting an issue that has long been a sore point with some customers.

A recent study by consulting firm cg42 found that 59 percent of Time Warner Cable customers were frustrated by their cable provider, in part because of outages and disruptions.

Customers are often not reimbursed for disruptions and frustrated by lack of information about when to expect service to be restored, said cg42 founder Steve Beck.

Todd Mitchell, an analyst at Brean Capital who has a "buy" rating on Time Warner Cable stock, said that the company has not invested enough money in its network.

“One would hope that any company that operated a network of this scale would put in the appropriate redundancies so that something like this wouldn’t happen," he said.

(Reporting by Jim Finkle in Boston and Marina Lopes and Alina Selyukh in Washington and Mary Wisniewski in Chicago; Editing by Jeffrey Benkoe and Cynthia Osterman)