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Television The Almighty Buck The Courts United States

Time Warner Cable Box Rental Inspired Antitrust Lawsuit 291

Posted by timothy
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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Time Warner Cable Box Rental Inspired Antitrust Lawsuit

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  • by Lumpy (12016) on Friday August 15, 2008 @07:53AM (#24613033) Homepage

    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.

    • by $RANDOMLUSER (804576) on Friday August 15, 2008 @08:22AM (#24613231)
      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.
      • by Shakrai (717556) on Friday August 15, 2008 @09:10AM (#24613659) Journal

        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.

        • I agree. I pay $20/month for online dvd rentals, and haven't had cable in about 6 years. I never looked back. Sometimes, when I'm at the gym, I'll watch the tvs there, and it reminds me how much I hate TV. (I feel the commercial-to-content ratio has increased dramatically since when I had cable.
          I'm much happier watching shows on dvd, on my schedule, and not interrupted by horrid ads.
          • I pay $20/month for online dvd rentals, and haven't had cable in about 6 years. I never looked back.

            Sure, DVD rentals work for films and scripted series, but not as well for time-sensitive live broadcasts like news, weather, and sports. True, news and weather are easy to get on the web or over free-to-air TV. But what do you do for sports, or do you just happen not to have a sports fan in your household?

            • Re: (Score:3, Insightful)

              by Crazy Taco (1083423)

              But what do you do for sports.

              I'm sure he watches broadcast TV for that, like Americans have been doing for decades.

              • Re: (Score:3, Insightful)

                by yuna49 (905461)

                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

        • 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 seem to remember reading that some cable modem providers require all residential high-speed Internet customers to subscribe to some cable television package, especially in areas where the phone company provides no high-speed Internet access. You're lucky that this package is "lifeline" and not "basic cable".

        • Re: (Score:2, Offtopic)

          by Crazy Taco (1083423)

          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.

          Agre

      • by initdeep (1073290)

        uhhh

        having just spent some time at my parrents house in raleigh, nc, and looking at what SA says their cable box has for features, versus what their local CableCo actually allows them to use, it's vastly different.

        so just like some mobile phone companies (looks sideways at Verizon) gimp their phones, so too do some CableCo's gimp the boxes.

    • Satellite is just as bad if not worse. Let alone the fact that HDTV has opened up all new fee structures that these companies can impose.

      Case in point. I actually canceled Dish TV yesterday. I have been a subscriber for nearly two years. What went wrong, well I bought a HD TV. Now they have these great packages costing $24.99 and up for HD only. Guess what, I can't get them because their "billing" system can't handle the switch and won't be able to until 2009. If I want HD from them I not only have t

  • I hope for the best (Score:4, Informative)

    by CastrTroy (595695) on Friday August 15, 2008 @07:54AM (#24613037) Homepage
    I hope for the best in this situation. It would be nice to have a system where you can build your own PVR, because, I have SageTV on my computer, and it's vastly better than and PVR box I have ever seen. It only works with the first 70 channels that are sent over plain old analog cable, but that includes most of the stuff I watch anyway. Most of the stuff on the digital only channels is movie/sports channels that I don't pay for, or time shifted (other time zone) stuff that I don't need anyway since I use SageTV. I still pay for the rental of a box, but it's only $4 a month, as it's just a receiver, and not a PVR. Things could be better, and I hope they get better in the future, but as long as I have my analog cable, I'm happy with things the way they are.
  • Bandwagon (Score:4, Insightful)

    by Devir (671031) on Friday August 15, 2008 @07:55AM (#24613045) Homepage

    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)

      by kannibal_klown (531544) on Friday August 15, 2008 @08:19AM (#24613203)

      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.

  • by Bentov (993323) on Friday August 15, 2008 @07:58AM (#24613063)
    It sounds good, but in the end, this will go nowhere. It's cable, you don't have to have it, and therefore he is choosing to pay $15 a month. Besides if the cable card option is available, does it really matter if it is hidden on their site, he can already buy another box. He should have waited until Feb '09, then he can get all of the grandma's with 25 year old TVs onboard.
    • 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?"

      • by CastrTroy (595695)
        Has Microsoft even paid 1 cent in fines for being convicted of antitrust? Have then been broken up? Have they release any APIs that the court ordered them to release? As far as I'm aware, they still haven't started paying the EU, or the USA for what they were convicted of. Problem is, MS is just too big, and too important to too many businesses to shut them down.
    • So while despite the prevalence of open standards in the cable industry (hello DOCSIS [wikipedia.org] and QAM [wikipedia.org]) and their wide support among the manufacturers of cable hardware, that it's okay for them to give me no choice but to rent hardware they approve of? That's like saying that AT&T's forced rental of phones in the past was a perfectly valid business practice. But then again, I suppose "It's telephone service, you don't have to have it."

      It's *not* alright for the company to charge me to rent the hardware, and t
      • by CastrTroy (595695)
        I'm going to play devils advocate here and so "so what". Let's just assume that the average person pays $X extra on their cable bill for all these extra things that they shouldn't be charged extra for. The government decides to make it illegal for them to charge their customers for this stuff. So, now, instead, to get around the law, they change their subscription price from $Y, to $Y + $X, which means in the end, you're still paying the same amount, and since they are pretty much a monopoly, you still h
  • by pandrijeczko (588093) on Friday August 15, 2008 @07:59AM (#24613075)

    ...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.

    • by mikael (484)

      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

      • Ummm.... You can go to dixons and buy a freeview digital TV tuner, and receive about 20 channels free from terrestrial sources - no satellite dish required. (assuming you live anywhere but Dartmoor)
  • I wonder... (Score:3, Interesting)

    by d3ac0n (715594) on Friday August 15, 2008 @08:02AM (#24613085)

    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."

  • by jimicus (737525) on Friday August 15, 2008 @08:08AM (#24613125)

    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.

    • by u38cg (607297)
      I remember as a kid, every piece of telephone equipment (like answering machines, etc) all came with a little sticker saying something like "not approved for connection to the public telephone network". The legal fiction was that you could only use these things on your internal network.
  • Whatevs (Score:4, Insightful)

    by longacre (1090157) * on Friday August 15, 2008 @08:14AM (#24613151) Homepage
    If they lost their box rental monopoly, they'd simply boost service rates to make up the difference. It would seem the cable companies want to eliminate boxes, anyway. Last week Cablevision won their long battle [reuters.com] with the networks over the right to offer DVR functionality from centralized servers. Their motivation: cutting their biggest capital expense...those boxes might work terribly sometimes, but they're not cheap, and charging $7 a month to rent one means they don't recoup the cost of one for over a year.
    • but they're not cheap, and charging $7 a month to rent one means they don't recoup the cost of one for over a year.

      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
  • Maybe it's a US thing, but I would assume that if I subscribe to a service, that either I should be able to use my own equipment or the equipment be included for free or as a one-off expense.
    • by Spatial (1235392)
      Going by what gets reported on Slashdot, Americans are generally happy to bend over and take it up ass for eternity, as long as they get entertainment in exchange.
  • MythTV (Score:4, Insightful)

    by aceofspades1217 (1267996) <aceofspades1217.gmail@com> on Friday August 15, 2008 @08:20AM (#24613205) Homepage Journal

    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.

    • by TeamSPAM (166583)

      I haven't keep track of MythTV lately as I have a TiVo HD. The problem with MythTV going forward is that it can only do HD with OTA. Since CableLabs won't approve MythTV (or any digital cable tuner cards) as a CableCard device it handicaps the usefulness for digital cable. As far as I can tell the only way to make it work with digital cable is to have the MythTV use IR blasters for the set top box. Which is the main reason I dumped my previous TiVo when the HD model came out. The IR blasters are not reliabl

      • by Abcd1234 (188840)

        The IR blasters are not reliable and the cable companies will not activate the serial port on that back.

        Really? Weird. I have my Myth box configured with two SD tuners hooked up to a pair of Motorola STBs, driven with blasters from irblaster.info, and in the two years the system has been running it has never, repeat, *never* missed a tune. Ever. And I record a lot of crap. :)

        For HD (if I ever upgrade), I'll go with the exact same setup, just using one of the new HD component capture devices that've hit

      • by jedidiah (1196)

        There is already an analog HD capture solution. It's supported in the current
        development release of MythTV and is already supported in a number of commercial
        PVR solutions (not MCE though).

        That "advantage" just flew out the window for Tivo.

        Tivos only work with your local landline monopoly. Mine only carries about 5
        HD channels beyond the locals that I can already get for free myself OTA.

        This is the most annoying aspect of this cablecard mess. In the old days, I
        could have quite effectively hooked up a Tivo to

      • by Big Boss (7354)

        Personally, I think CableLabs should be forced to release the specs to communicate with CableCards as open source and the providers be required to activate anything that can do the handshake. They shouldn't be required to offer tech support other than getting the card to communicate, but they shouldn't get to lock it all down either. I think it's retarded that they can lock out anyone they don't like.

        Note that I said the specs to interface to a CableCard, NOT the internal code or schematics. that means that

    • Don't underestimate MythTV. It's been a viable option for awhile. I've been running a Knoppmyth [mysettopbox.tv] box for almost 2 years. The initial outlay was small (I was replacing my computer anyway, so I needed a HTPC case and a TV card (total about $200). Added to the cost of components, it's a little steep, but it's got a lot of advantages.

      1. No "rental" fees to Comscat. $20/yr to schedulesdirect beats $10/mo
      2. The box is MINE.
      3. The integrated DVD player ignores stupid "Don't skip" directives on FBI Warnings, Preview

    • MythTV as good as it is not the ultimate solution. It's great on analog cable. Unfortunately HD cable requires you to have a HD cable decoder which only the cable companies supply. This HD decoder is different from the over-the-air kind you can buy and is likely to have DRM. Now you can pair your MythTV with your digital cable box (all digital boxes must have a digital out like USB or Firewire port), but you are limited to what those boxes can do. Almost all digital boxes only handle one stream at a t

  • Cable TV as we know it is circling the drain already.

    The whole idea of sending a 750 MHz wide signal (yes! nearly 3/4 gigabit!) of signal to a home, where only 3-6 MHz of signal is actually going to be used is just plain silly.

    I cannot wait for IP-based television to become predominant. The television and video entertainment markets as we know them are going to be stood on their heads, and it could not happen to a nicer bunch. (You can already see this happening with Apple TV and the RoKu NetFlix player.

    • The whole idea of sending a 750 MHz wide signal (yes! nearly 3/4 gigabit!) of signal to a home, where only 3-6 MHz of signal is actually going to be used is just plain silly.

      The 750 MHz signal is sent to a whole neighborhood. How does the cable operator know which live streams someone actually wants to watch, unless the cable operator sets everything up on demand? There are already delays in waiting for the next keyframe when tuning in a channel; treating every channel as an on demand stream would just make the delays longer.

      I cannot wait for IP-based television to become predominant.

      What in television is not intellectual property-based?

  • I get tired of these sort of tactics. Fortunately, there's competition now here in Austin, so I'll be switching to AT&T with NO DVR rental fee and no cable modem rental. (But then again, their high speed internet is $10 / month more than Time Warner, but Time Warner charges $10 / month for the modem...just on principle alone I'll pay AT&T more.)
  • Speaking as someone who works for the cable industry, this is a dollar short and a day late. The cable industry has already taken steps to increase competition in the cable box marketplace. http://www.opencable.com/ [opencable.com] The Opencable platform is going to be the next generation of the cablecard technology (which already suits his needs btw). Cablecard was created to allow cable subscribers access to the digital channels on their own devices. Basically cablecard is a hardware secuirty token that allows acces
    • Re: (Score:3, Insightful)

      by Vegeta99 (219501)

      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?!

    • by Big Boss (7354)

      I'll be excited about this when it's actually OPEN, not that it just has "open" in the name. That means I can download specs, for free, to build a device to decrypt channels that I paid for and the parts needed to do it are available from a large supplier like Digikey with no further licencing requirements and no requirement that the cable company or CableLabs "approve" my device. If it's technically capable of being connected and not harming the network, I should be able to connect it and the cable company

  • On direct TV each box after the 1st is $4.99 a mo for any box. Dish and cable make you pay more if the other box is a HD or DVR on top of the box free.

    Comcarp web site makes it very hard to find the true cost for of the box fees with pick the boxes with out a way to tell you want you need to pick for the 2th or more box is it the HD fee + digital outlet fee or the HD fee + the DVR fee Just the digital outlet fee and so on? And they want $10 - $30 per box up front based on what box you pick. And the HD boxes

  • by gravis777 (123605) on Friday August 15, 2008 @10:31AM (#24614981)

    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.

  • This will have an effect on all other local cable co's.
    It doesn't make sense about set top boxes.
    You can buy one, but they are not fully legal, because it may be a hot box.
    Yet they offer you the option to purchase your cable modem from them.
  • What if he wins? (Score:3, Insightful)

    by daveywest (937112) on Friday August 15, 2008 @11:59AM (#24616529)

    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.

    • by dilvish_the_damned (167205) on Friday August 15, 2008 @02:06PM (#24618653) Journal

      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.

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