Time Warner Cable Box Rental Inspired Antitrust Lawsuit

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."

Comments

As an Ex cable industry insider....

[Lumpy]

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....

[$RANDOMLUSER]

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.

Re:As an Ex cable industry insider....

[Shakrai]

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:As an Ex cable industry insider....

[Shakrai]

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 $20 in 1998 was worth $25.75 in 2007.

I hope for the best

[CastrTroy]

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

[Devir]

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

[kannibal_klown]

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.

Choice is there, he just doesn't like it.

[Bentov]

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.

Re:Choice is there, he just doesn't like it.

[Gewalt]

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.

Re:Choice is there, he just doesn't like it.

[betterunixthanunix]

FiOS is not available in every region, NetFlix is in the video rental market (which is a different market from TV services), satellite is no longer a serious competitor to cable, and file sharing is not legally clear. Time Warner's only competition in many places is other cable providers, and in some places that's not even true.

Re:Choice is there, he just doesn't like it.

[Medievalist]

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!

What's more disturbing to me...

[pandrijeczko]

...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.

Re:What's more disturbing to me...

[Life2Short]

Exactly wrong. Premium cable channels were originally commercial free in the U.S. That was one of the reasons early cable was a "big deal." One watched movies on HBO for example, not commercials. AMC is another good example. No commercials ever. Almost all cable channels in the late 70s / early 80s had limited or no commercials. Then the commercial creep set in. Commercials between the movies. OK. Commercials during the movie, lots of them. And in the intervening time cable rates have gone up at rates that far exceed inflation. We're paying more for cable and getting way more commercials. It's crap. And before someone says that channels like AMC now offer original programming, let me remind you that they introduced commercials long before they produced original programming.

Whatevs

[longacre]

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 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.

Re:Better solutions are out there..

[Icarium]

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.

MythTV

[aceofspades1217]

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:Better solutions are out there..

[Albanach]

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:Better solutions are out there..

[OS24Ever]

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?

[dilvish_the_damned]

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.