Time Warner Cable Box Rental Inspired Antitrust Lawsuit 291
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."
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.
Comment removed (Score:5, Insightful)
Re:Choice is there, he just doesn't like it. (Score:1, Insightful)
I completely agree with you. Although I personally despise the practice and would rather see things opened up, 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.
Like the parent post said, there is competition. I get a free DVR with AT&T's U-verse. They used to even give out 4 for free, but that's no longer true. But this is one more free DVR than Time Warner apparently.
Re:What's more disturbing to me... (Score:1, Insightful)
This is a silly way to look at it. They could do it ad free. It'd cost a LOT more though, plus what would they do with the natural breaks? American TV in particular is made with ads in mind, so they'd basicly have to fill it with something else.
It's similar to being offered a newspaper without ads in it for £20 or one with ads in it for 20p.
Would you pay that much more for your tv to get rid of ads? Most people won't, so they find the level people are happy to pay, along with the advertisement level that allows them to cover costs, make a profit and not turn people off.
Whatevs (Score:4, Insightful)
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.
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.
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.
Re:Knowing the cable companies... (Score:3, Insightful)
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.
Re:As an Ex cable industry insider.... (Score:5, Insightful)
Re:Choice is there, he just doesn't like it. (Score:1, Insightful)
That's the understatement of the year.
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?
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.
Re:Better solutions are out there.. (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.
Re:Choice is there, he just doesn't like it. (Score:3, Insightful)
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.
Yet Another Useless Lawsuit by the Ignorant (Score:2, Insightful)
Re:Yet Another Useless Lawsuit by the Ignorant (Score:3, Insightful)
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?!
Re:What a friggin loser... (Score:2, Insightful)
The other thing, that everyone needs to realize, is that that $7 a month is called a box rental fee, but that's also to cover support costs for that box. When a customer has a problem with the box itself, are they calling Scientific Atlanta, or Time Warner Cable? They call Time Warner Cable.
So fine, get your own box, but then, just like the phone company, if a customer is having technical issues with that cable box that is unrelated to Time Warner's cable signal, then that customer calls the manufacturer of the cable box.
Re:Choice is there, he just doesn't like it. (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:Netflix doesn't work for sports (Score:3, Insightful)
I'm sure he watches broadcast TV for that, like Americans have been doing for decades.
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:Netflix doesn't work for sports (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 desires of most fans who want complete season coverage.
In the Boston market, neither the Red Sox nor the Celtics are available on local television. The Patriots (football) are on the local CBS and FOX affiliates, but that's because the NFL has a league-wide deal with its broadcast outlets. When the Red Sox were sold to their new owners a couple of years back, one of the most important parts of the package was NESN. At the time it was valued at about $750 million, or about a quarter of the entire price of $3 billion. After ending the World Series drought in 2004, NESN's value increased substantially. Since there are only a fixed number of seats in Fenway Park, much of the potential for revenue growth potential lies in services like NESN and expansion to international markets like Japan [boston.com].
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.
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.