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Time Warner Cable Box Rental Inspired Antitrust Lawsuit
Posted by
timothy
on Fri Aug 15, 2008 06:43 AM
from the but-they-lobbied-hard-for-this-territory dept.
from the but-they-lobbied-hard-for-this-territory dept.
EmagGeek writes "Matthey Meeds, a real-estate agent, was so irritated about having to pay the monthly rental fee that on Tuesday he filed an antitrust suit against Time Warner Cable and its 84 percent owner, Time Warner Inc. The suit alleges that, by linking the provision of premium cable services to rental of the cable box, the companies have established illegal tying arrangements. 'Time Warner's improper tying and bundling harms competition,' Meeds' lawsuit states. 'Since the class can only rent the cable box directly from Time Warner, manufacturers of cable boxes are foreclosed from renting and/or selling cable boxes directly to members of the class at a lower cost.' I pay Comcast over $25/mo for my two DVRs. I'd love to just be able to buy them or build my own. I can't wait to see how this unfolds."
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As an Ex cable industry insider.... (Score:5, Interesting)
I really hope this goes a bad way for cable companies. They have had a tight lock on cable boxes for too long, we have been stuck with the crappy quality cable boxes from motorola and SA for too long.
Re:As an Ex cable industry insider.... (Score:5, Insightful)
Parent
Re:As an Ex cable industry insider.... (Score:5, Insightful)
And the reason those boxes are of such crappy quality is because the cable companies have such a tight lock. The cable companies want to keep the box cost down to maximize their own profits. If Motorola and SA could sell directly to consumers, they would suddenly have an incentive to improve the quality.
If consumers would grow a pair of balls and realize that TV isn't really worth this much money Time Warner would eventually have to lower their rates or be content with less subscribers. I remember when basic cable (roughly 40-50 channels back in the day) cost $20/mo around here. That was as recent as nine years ago before the local cable company got bought out by Time Warner. Now it costs $60/mo for the same number of real channels and about a dozen home shopping channels that weren't available before.
I dumped my cable down to 'lifeline' (local stations only) four years ago and haven't looked back since. Hell, I'd dump lifeline and go with an aerial if I could get decent reception out here in the boonies. The combination of the internet, books, PBS and the major networks is all the entertainment I need.
Parent
Re:As an Ex cable industry insider.... (Score:4, Informative)
Umm, I'm pretty sure we aren't on the gold standard any longer so what relevance does the price of gold have to do with anything? Somehow I think if we had 300% inflation in the last nine years that it would be a story..... according to this [westegg.com] $20 in 1998 was worth $25.75 in 2007.
Parent
Re: (Score:3, Insightful)
I'm sure he watches broadcast TV for that, like Americans have been doing for decades.
Re: (Score:3, Insightful)
Perhaps you haven't noticed, but many local teams have moved their games to pay services. Some of these channels (like the New England Sports Network) are advertiser-supported and carried on cable programming tiers, while a few are still a pay-per-channel service similar to HBO.
In the case of the Boston Red Sox, probably some 140 or more of their 162 games are on NESN. The national outlets, Fox and ESPN, carry the occasional game (usually Red Sox vs. Yankees), but certainly not enough to satisfy the desir
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I hope for the best (Score:4, Informative)
Bandwagon (Score:4, Insightful)
We should join the venture and do this with Verizon FIOS.
I'm paying out almost $30 a month extra for 2 set top boxes and a DVR because they're required. We can't even watch the 10 "normal" channels anymore on a STB free tv. I have 2 more TV's i'd love to hook up but dont want to spend an extra $10 per STB per month.
David needs to take down Goliath again.
Re:Bandwagon (Score:5, Informative)
For a while Verizon Fios was giving out free Digital adapter boxes if you went to a service station and asked (no purchase or rental). They're really cheap-quality boxes, about the size of a CD wallet and don't have a TV Guide or VoD server. They just allow for manual entry of channels via a remote (which is what most people really need anyway).
But they can watch all non-HD channels that you subscribe to, all the way up through the 1000's.
I think they charge for them now as a purchase (not a rental). So you might want to ask about it.
Parent
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Choice is there, he just doesn't like it. (Score:3, Interesting)
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So, by your justification, Microsoft was never guilty of any anti-trust violations because "people didn't have to have it (Windows), they chose to buy it?"
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I can't tell if that's sarcasm, but that's not the definition of monopoly.
http://en.wikipedia.org/wiki/Monopoly [wikipedia.org]
Monopolies don't need 100% market share, they just need enough to be able to shape the nature of the market in that type of good. How the market is defined affects whether or not the entity is considered a monopoly. In the case of desktop OS, the 90% share means MS can affect the market in a big way. It may not be able to dictate terms, but it can certainly shape it.
He should be able to choose his hardware (Score:2, Interesting)
It's *not* alright for the company to charge me to rent the hardware, and t
Re:Choice is there, he just doesn't like it. (Score:5, Insightful)
it is Time Warner's network and they should be able to do whatever they want with it. I hate this current generation of people who think they're entitled to something just because they don't think it's "fair". Well, I've got news for you, this is how property rights work. If it's your property, you get to decide what to do with it.
But... It's not their property. It's actually the government granted right of way. What does that mean? That means IT'S YOUR PROPERTY. If there were actual competition, then sure, what you said is valid. But there isn't competition, cause the government said they don't need any competition. the government said they can go ahead and abuse YOUR PROPERTY to setup this network. In return, they are obligated to follow rules that are supposed to be more stringent because the free market is not capable making sure the deal is fair.
Parent
Re:Choice is there, he just doesn't like it. (Score:4, Interesting)
Parent
Re: (Score:3, Informative)
From what I've seen of the comments on this article, people are confused about the nature of Time Warner's services. Time Warner does not give a simple DVR, in fact, the machine they give you is not technically a DVR at all, from what I can tell.
Re: (Score:3, Interesting)
The whole cablecard thing has fouled that all up.
Before "digital TV" you could use the same equipment on both
landline and sat cable. Now you are stuck with a limited
selection of equipment that will ONLY work on landline cable
systems and not at all with satellite cable systems.
If everything was just going through component, or some
channel on ATSC on the coax line, this situation would
not exist.
This entire "lack of replaceability" is due entirely to
this misguided cablecard idea and the notion that the
cable si
Re: (Score:3, Insightful)
That argument failed AT&T, and it is what allowed 3rd party hardware (phones, modems, faxes) to use the telephone system, as long as it did not cause harm/damage/interference with the network.
Re:Choice is there, he just doesn't like it. (Score:4, Funny)
Property rights aren't always absolute. E. g. You might get some disagreement from a surprising source if you started exercising your property rights to remove your local cable provider's transmission lines from your yard
Yeah, Comcast got surprisingly upset when somebody took an axe and cut their cables at my property line. The cables were all neatly tied back to the nearest pole and everything, you'd think they'd appreciate the tidyness of it. There was no easement in my deed that applied to Comcast, so I refused their repair crew entry to my property and they had to route around me (in the power company right-of-way that they were supposed to be using in the first place). My property had a lot more curb appeal without their ugly, poorly maintained wiring draped over it, so I have no complaints.
At about the same time, I happened to find some nice abandoned coax with an integrated heavy steel suspension line, that was very useful to a project I was working on. Go figure!
Parent
What's more disturbing to me... (Score:5, Insightful)
...are the vast numbers of people over the whole of this world of ours who *pay* for TV services that *also* have advertising included.
Here in the UK, you don't get much of a choice to not pay the TV License fee but at least everything the BBC broadcasts is advert free. And likewise, I will happily sit & watch the free cable/satellite channels that have advertising breaks.
But I definitely *WON'T* pay to be advertised at.
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My parents have a Sky 'freeview' card - they get all the USA/European/Asian news channels for free (CNN, Russia Today, CCTV-9, Euronews, Deutsche Welle, FR-2) while with Virgin Media Cable, you have to pay for the most expensive channel bundling option in order to get the very same channels.
Virgin media more or less has an monopoly over anyone (or any apartment block) that hasn't been cabled for a satellite dish. Of course, there are portable satellite dishes [maplin.co.uk], but that depends on having a South facing wind
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interesting point:
over here in europe we have less ad breaks than in the US and they tend to be shorter, the channels I'm used to generally have 1 break every 15 minutes for 2-3 minutes. Do you really have breaks every 10 minutes or less on some channels? I notice it in shows made for american TV that every now and then there's a point where it breaks for a split second and cuts back like at the start and end of an add break.
Some old kids shows were quite funny, *hero gets into impossible to escape situatio
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Some programming blocks on some channels are nice enough to only cut the half hour block in half. One example is Cartoon Network's Adult Swim, where they tend to show like 11 minutes, then a few minutes of commercials, then the other 11 minutes, then five minutes or so of commercials.
Basically...
11 minutes show
3 minutes break
11 minutes show
5 minutes break
But I figure what is worst, is when some networks, which I won't mention, have pop-ups during the show advertising other shows on their network. And these
Re: (Score:2)
I'm "less" annoyed by the popups now, but only because some people got a clue about the noise-factor.
If I'm watching a crime drama I don't need to hear the sounds of car engines roaring and impact wrenches activating to notice the Nascar logo on the bottom of the screen.
Seeing the logo is one thing, not being able to hear the dialog in a friggin MYSTERY show is infuriating. Thankfully I don't experience many of those loud popups anymore.
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oh wait... your argument just fell apart there...
Re:What's more disturbing to me... (Score:5, Informative)
Parent
Re: (Score:3, Interesting)
Excellent point, I always found it odd that even the quite expensive "premium" channels have advertising.
Define premium.
Around here, we define premium as HBO, ShowTime, Starz, etc. The only commercials I've ever seen on these channels are adverts for themselves... like "Tune in next month for a new season of Dexter, everyone's favorite serial killer" or "The Tudors are returning this fall." I find that completely acceptable.
Then again I don't watch any premium Sports channels so I don't know much about them.
Don't get me wrong, I find it annoying that there are so many adverts on basic cable.
I wonder... (Score:3, Interesting)
Would a consumer-positive result (IE: Time Warner loses) also have any kind of side-effect on the issues surrounding the cable "Broadcast Flag" controversy and digital T.V. cards for PC's? Admittedly, I stopped following that entire scene a year or two ago when the flag came to life, so it may have already been resolved, but it does make one wonder what far-reaching effects a positive ruling in a case like this might have.
To quote the great philosopher, Fezzik: "I hope we win."
I can think of an interesting parallel in the UK (Score:3, Interesting)
Way back in the mists of time, the UK telecoms market was a government-granted monopoly - initially granted to the Post Office, later spun out into a separate company.
Go back far enough, and anyone who wanted a telephone was obliged not only to rent the line but also the telephone itself (which was listed on the bill as a separate item that you rented). Someone did take the telco to court over this and won - and today there are any number of telephones on the market you can plug in.
Furthermore, the cable company (another monopoly...) always goes to great pains to stress that the cable box (and/or cable modem) is free, you're just paying for the line it connects to. I don't doubt that these two are related.
Whatevs (Score:4, Insightful)
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Wow, I don't believe i. They have to wait a whole year to recoup a capital expenditure.
My god, how do they stay in business ?!?!?
I guess I shouldn't be surprised, it used to be than Long term was 20+ years, medium term was 5-20 years, and short term was anything under 5 years.
Nowadays it seems that long term is a whopping 12 months, medium term is 2-6 months, and short term is anything up
I don't get this at all (Score:2)
MythTV (Score:4, Insightful)
If this pans out than MythTV will finally be a viable solution. MythTV is a great system and works splendidly as a DVR and it has its own browser and you can do pretty much anything linux can do from your remote and they are cheap because they use standard parts. So you could probably build your own set top box for 300 dollars. Moreover if these set top boxes were mass produced than they could be really cheap. Even though they probably wouldn't have too many bells and whistles but they would be cheap and you wouldn't be forced to pay a monthly fee for a POS device.
Either way all this bundling is killing us. Whether its cell phones or cable boxes they are sapping all our money.
At least you don't have Dish (Score:3, Informative)
Paid $300 up front for my DVR, then the setup fee, then the activation fee, then I still have to pay a fee each month for the rental of the box (their excuse is that its a $700 box and I got it at a discount), then I have to pay for the DVR service. Then I paid the $40 one time fee to activate the USB port so that I could use MY external HD, which they cut access to if I am just one day late on my bill.
What if he wins? (Score:3, Insightful)
Full disclosure: I work for a small cable operator.
Ok, what if he wins. TW still has to pay for the costs of those boxes. The ones we use cost up to $400 from SA if they have a DVR. Instead of spreading the cost fairly among all subscribers, everyone's price goes up.
The guy can try to sue for openness, but that's exactly what the FCC has tried to push with the CableCard system. It hasn't worked. The free market isn't there because it's not a sustainable business model.
In the year we've been on digital, we've had one person ask about using a CableCard because his TV was supposed to support it. He finally found out that his TV was built on a draft version, and wouldn't work without a hardware upgrade.
Anyone here ever performed an upgrade on their TV?
If TW was violating the FCC rules, I could see this guy having a case, but he can't even find hardware that will support the CableCard lock/key system operators employee to secure their system.
Re:What if he wins? (Score:4, Insightful)
The cable card system DOES work, I am using it now. However I was forced to rent a cable box as a basic requirement for getting premium services in addition to the cable cards. I only plugged it in once, and as it turns out, the thing is broken. It sits in my closet, sipping up $15 a month out of my wallet.
And yes I have performed an upgrade on my TV, if by upgrade you mean firmware ( this is slashdot, right? ).
As far as taxing everyone to spread the cost of the boxes ( by way of forcing everyone to get one ), it would seem like TW could save $400 by not forcing me to stash on in my closet and maybe charge everyone a bit less.
You guys pay $400 for a cable box? Seems a bit stiff considering the price of a tivo. Maybe this is exactly what I am talking about.
As far as an open platform not being a sustainable business model, how would we know? I mean, TW did force me to get that cable box right? Seems like cable companies are not giving CableCard a fair shake on purpose. If it were not for FCC mandating it, TW would not support it at all ( they barely do now ). I wonder why? I lied, I don't wonder much at all.
Stop drinking the CoolAid, its not good for you.
Parent
Re: (Score:2)
Switched video's been a problem for over a year (I remember worrying about it before buying my Tivo HD). The 'solution' from Tivo has been 'coming' for months - I want to say this was announced in January.
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Last I heard, it was a dongle you plug into the USB port on the back of the Tivo. Engadget [engadget.com] reported it was supposed to be available 2Q2008.
Re:Better solutions are out there.. (Score:5, Insightful)
Naughty. You used the word "Vista" and "solution" in the same sentence without a negative. This is Slashdot, what were you thinking?
Anyways:
Enjoy your 3 months of free DVR rental as part of your settlement offer
The point here is not to make a quick buck in a settlement. It's to get the cable company to unbundle thier service from thier hardware. If the company won't give you access to thier premium services without renting thier cable box, your alternatives don't help.
Parent
Re:Better solutions are out there.. (Score:5, Insightful)
There are two sides to this coin though.
Yes, TiVo's are awesome. Unless they break, then you have to fix it. 'Fix' sometimes = Buy a new one.
Time Warners box costs $6.95 or whatever a month. It'd take you 43 months to pay $299 that say a TiVo costs (ok not all do, but I'm doing the HD dual tuner model)
When has one TiVo stayed on the market for 43 months without a new model with new features?
At time warner, I get a new one if a new functionality/feature comes out, and if it breaks, I get a new one no questions asked (barring 'why does this look like it was beat with a hammer' kind of thing)
oh, did TiVo stop charging monthly too? I quit using one about two years ago. yes you can buy the one time thing I think, but again that's a good chunk of money.
Having had a TiVo Break, or a new version come out within 43 months of purchase, I can say that to me the time warner deal isn't that bad.
Parent
Re:Better solutions are out there.. (Score:4, Insightful)
So you're paying almost $50 a year for two cards that costs cents each to produce. They've done exactly the same thing by forcing you to rent cards rather than cable boxes.
What exactly is the monthly fee supposed to be covering? It may even be that their margin on cable box rentals isn't much different than that on card rentals.
Once, the card is issued all it is is a number in a database to them. This is like a hotel charging you per night for the room key.
Why on earth aren't they charging you a couple of dollars for the card and then being done with the charging? Perhaps you should join the suit or start your own?
Parent
Re: (Score:3, Insightful)
Because they it makes it harder for them to claim they still own the card.
Subscription pricing makes it clear it isn't yours.
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Tivos do not necessarily have a monthly cost for listings. Lifetime service (tied to the box) has returned for all. You have to decide whether the 'gamble' is worth it to you, but generally the thing to go wrong on a Tivo is the hard drive. (Even if it is not, you can usually pay a certain fee to Tivo to get a new box and have the lifetime transferred. That refers to the case of a broken Tivo. What you can't do is just go buy a new Tivo and expect to transfer the lifetime service -- with rare exceptions
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They'll just raise the monthly rate to compensate if they can't charge a rental fee for the box.
They'll just raise the monthly rate
Fixed that for you.
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Wait, you just said they don't exist yet! Re-read your own comment. Sure, I can get a CableCARD, but no VOD or any other two-way services.
Besides, go to Comcast's website and try to find a CableCARD and the fee. You won't. And why should I have to pay the damn fee anyway? Why can't I just give them a serial number off the back of the damn thing after I bought it at WalMart?!