Anti-Trust Class Action Filed by Huntington Subscriber Against Comcast Cable - Huntington News Network
May 19, 2009Anti-Trust Class Action Filed by Huntington Subscriber Against Comcast Cable
Judge Chambers Steps Aside as He Subscribes to ComcastBy Tony Rutherford
Huntingtonnews.net ReporterHuntington, WV (HNN) – Gordon Ramey II, a Huntington cable television customer has filed a federal anti-trust complaint against Comcast Cable Communications (et. al.) due to mandatory rental fees for “cable box” or “set-top-boxes,” which are mandatory to view premium and/or digital cable. Since Comcast commands more than 50% of the United States cable market, the requested class action complaint filed in the United States District Court for the Southern District of West Virginia, alleges that the company’s actions “constitute an unlawful tying arrangement resulting in an impermissible restraint of trade” that violates federal and West Virginia laws.
The case had been assigned to Judge Robert Chambers, but Chambers, himself a subscriber to Comcast Cable, disqualified himself.
“Although I am not a named plaintiff, I assume I am a putative member of the class as I am a current subscriber of cable services from Comcast,” Judge Chamber wrote in an April 30, 2009 ruling. He “out of an abundance of caution” voluntarily recused himself from the case. He cited Canon 3 of the Code of Conduct for Judges that “implies that even membership in a putative class may disqualify a judge who has a contractual relationship linked to the proceeding.”
As a result, U.S. District Judge Joseph R. Goodwin has been assigned to hear the case.
As explained in the complaint, subscribers to the digital and/or premium can at their discretion purchase their own cable box; in fact, Comcast has a policy that allows it to occur:
Comcast has a published policy that states: “If you plan to purchase cable services that we scramble or encrypt, such as premium, pay per view or digital services, you should make sure that any set-top converter or navigation device or digital cable ready television … that you purchase from a retail outlet is compatible with our system… Upon your request, we will provide you with the necessary technical parameters necessary for any set-top converter rented or acquired from retail outlets to operate with our cable system.”
However, the complaint alleges that “customers are instructed that they cannot use set-top cable boxes purchased or rented from retail outlets to view Comcast’s premium channels and/or digital cable services. By doing so, Comcast “requires, forces and/or coerces members of the Class who wish to have more than one cable box, to rent the cable box directly from it even though cable boxes are available on the open market.
The complaint is not an attempt to obtain reduced fees for the channels as it states that “members of the class could purchase a cable box from a manufacturer of their choice and use it to view the digital and/or premium cable channels paying Comcast only for the digital/premium channel service and not the additional cable box charge.”
Rental charges, according to the complaint filed April 10, 2009, suggest that the company provides one free set top cable box but “for each additional cable box charges $8.90 for rental of a basic set-top cable box, $15.40 for a High Definition-capable set-top cable box and $20.90 for a High Definition-capable set-top cable box with DVR functions.”
Under the plaintiff’s class action claim, it alleges a violation of the Sherman Anti Trust Act by “improperly tying and bundling its digital and/or premium service with the required rental of a set-top cable box.” Due to a monopoly in cable markets and its dominance in the industry, the company’s “sufficiently strong economic power” , cable box competitors have “little motivation” or are “foreclosed” from entering the market, since Comcast which has more than 50% of the cable market.
Ramey’s attorneys allege that the cable provider purchases the boxes from Motorola or Scientific Atlanta “at a fixed and low cost… only to turn around and rent the same boxes to the class with full knowledge that members of the Class have no choice but to pay the rental fees.”
In addition, the complaint maintains that the Federal Communications Commission has “a regulation requiring the cable industry to separate the descrambling and other security capabilities of a cable box and place the capabilities in a separate device, which is called a CableCARD.”
The complaint admits that Comcast has the cards available, but describes it as inferior to the rental boxes. On its website, the cable provider states that customers who opt for the credit card size plastic in a “small one-way Digital Cable decoder” (which fits inside an expansion port in newer televisions) does not allow those customers to take advantage of interactive services, such as On Demand and Pay Per View offerings. It too is “a piece of equipment that the customers rent from Comcast just like a digital set-top box.”
YOU CAN DOWNLOAD A PDF COPY OF THE SUIT BY CLICKING HERE.
Editor’s Note: Although the complaint alleges a monopoly by Comcast, it should be noted that subscribers could elect to purchase satellite provided service i.e. Direct TV and/or Dish Network, which do compete with Comcast. Further, it is the understanding of HNN that the City of Huntington’s franchise agreement with the company has expired and it has been extended, much like the city employee collective bargaining agreements, on a month by month basis. A class action request and civil complaint outline grievances of a party or parties (“plaintiffs”) against the defendant. Under the litigation process, the company must now “answer” (give its version of the issue) after which the Court will assign a scheduling order so that the parties attorney’s can work through the legal and/or factual issues. If not settled, the plaintiff has requested a jury trial.
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