Wednesday, May 20, 2009

Comcast sued for Monopolizing Cable Boxes, CARDs

A California woman filed a class action complaint against Comcast, charging that the company is using its monopoly power to keep her paying monthly rental fees for decryption hardware.

By Nate Anderson | Last updated December 26, 2008 8:05 AM CT

Cheryl Corralejo is mad as hell at Comcast, and she isn't going to take it anymore. The object of her righteous crusade? Cable box rentals. Corralejo wants to own her box outright, and she has filed a class action complaint on behalf of all other Californians who desperately want to stop paying monthly fees just for a bit of decryption equipment.

The case, filed in federal court in California, began in late November and was recently unearthed by Multichannel News. Comcast has yet to respond.

The gist of the case, according to a copy of the complaint seen by Ars Technica, is rental fees. Corralejo argues that Comcast has a monopoly over video service in her area and that it uses that monopoly power to force her to use decryption equipment, which Corralejo cannot purchase outright. After only a few months, alleges the complaint, end users have already paid Comcast more than the box is worth.

Reading the complaint through is an odd experience, because the first pages sound like something written when the whole CableCARD debate was pending before the Federal Communications Commission. In the end, the FCC forced the industry to separate out its decryption equipment into a physical CableCARD that could be acquired separately from a cable company box and could be inserted into any third-party video gear that supported it. In other words, renting a cable box has not actually been a requirement of cable operators for years.

On page six, the complaint finally gets around to the point, acknowledging it but arguing that CableCARDs aren't the equivalent of set-top boxes. The complaint quotes from Comcast's own website, which points out that "the full range of interactive services" may not be available with a CableCARD, as current host devices generally support only one-way operation.

In addition, Corralejo complains that the CableCARD still has to be rented from the company; it cannot be purchased outright. There's simply no way to avoid some form of rental fee. (Comcast's website indicates that the first CableCARD a customer needs is included in the monthly bill, however; only additional CableCARDs cost money, currently "up to $2.05" a month.)

These practices are called "unlawful tying" under the Sherman Antitrust Act, as well as a violation of California's business and professions code.

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