Your Cable Company Also Rents You a Cable Box? Sue ‘Em!

by Alex Harris on August 15, 2008 · 1 comment

in Economy, Tech & Telecom

what TimeWarner offersTime Warner Cable is getting slapped with an anti-tying lawsuit. The plaintiff claims that by renting him a cable box, the company engaged in unfair trade practices. He acknowledges that he could have instead rented a CableCARD and used his own cable box, but claims it was too difficult.

But tying arrangements are good for consumers. They allow cable companies to offer packages that customers want (after all, if I’m buying cable service, I probably want a box too) at lower prices than they’d be able to provide a la carte. That’s because bundling provides revenue predictability. It’s the same reason you can get combination platters at restaurants for less than each a la carte item added together – and the same reason a dozen eggs costs less than two half-dozens.

Now, I will admit that perhaps the same analysis does not apply wholesale to cable companies, who are often government-granted monopolies. But the correct solution to this problem is not more regulation, but rather to eliminate the anti-competitive franchise system.

For more details, stay tuned to TLF for Ryan Radia‘s upcoming post on the subject.

Bruce Illig September 4, 2008 at 1:39 pm

How about this? I paid "full platinum" package for two years while getting only the 14 fuzzy channels that you get free plugging direct to cable without a box. I was listed for two years as "disconnect, yes" on the office paperwork, while listed on my cable setup page on TV as "disconnect, no" , since my bill was always paid in full. It only took two years and two tech supervisors standing in front of my TV screen to finally convince the telephone rep to finally turn on my service after two years. Now, and here is the "ala carte" part, they have been charging me $10 a month times 3 for 18 months kareoke, anime, and movie "on demand" monthly services I did not order. Incredibly, the services are listed in the on demand menu as $0.00, and there is no box for subscribing, no charges listed. Yet I am told I must have ordered the services, perhaps by accident. No rep I spoke with has ever seen the screen I allegedly ordered from, or can tell me how to even "purposely" order the pay services, listed at $0.00. This is called service cramming in the telephone industry, and is highly illegal. I am in process of determining how and who to sue. Any thoughts? Charter Communications is the target. As soon as I find a reliable internet provider, I am going wireless and Direct TV. Good luck dealing with any of these creeps.

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