Consumer Group Files Class-Action Lawsuit, Demands Cable Choice
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In an attempt to gain open access to cable networks, a group of Los Angeles consumers has filed a nationwide class action lawsuit against AT&T Corp., Time Warner Cable and other leading cable companies seeking injunctive relief and damages.
The lawsuit alleges the defendants have harmed more than 500,000 consumers by depriving them of the right to choose their high-speed Internet service provider and forcing them to either purchase Internet services they do not want or pay much more than a competitive market would allow.
Susman Godfrey LLP, filed the class action lawsuit in the U.S. District Court, Central District of California, Western Division in Los Angeles on behalf the consumers.
Parker C. Folse, III, Susman Godfrey partner in the Seattle office and lead counsel for plaintiffs in the lawsuit, said consumers want to choose their provider for high-speed Internet services.
"But experts, educators and futurists are all telling us that high-speed, broadband Internet service is our future, and in that market, AT&T (T), Time Warner (TWX) and the other cable companies are telling us we have only one choice in the communities they serve," he added.
Other cable companies named in the lawsuit include Arahova Communications, Inc., Cox Communications, Inc. (COX), Comcast Corp. (CMCSA), Cablevision Systems Corp. (CVC), Jones Intercable, Inc. (JOIN), Tele-Communications, Inc. (TCOMP),< /a> and MediaOne's MediaOne Group ( UMG).
This lawsuit contends that basic antitrust law gives consumers the right to choose their own ISPs. The suit is similar to the claim filed by GTE Corp. in Pittsburgh in October, but also seeks to create new laws regulating broadband access in the U.S.
Folse said anti-trust laws provide for competition and consumer choice provisions that are fundamental to the free-enterprise system.
"We believe that, under established principles of antitrust law, what many cable companies have been doing is illegal, anti-competitive, and anti-consumer," Folse said. "The complaint we have filed contends that the cable companies named as defendants are preventing the growing number of consumers who want high-speed Internet access from enjoying the full benefits a competitive market would bring."
The lawsuit does not specify a dollar amount for damages, but it does challenge current cable practices nationwide.
Currently, Internet users can continue to use their present ISP after they subscribe to a new high-speed provider through a cable company. However, they are required to pay for both, and to use the cable-provided @Home or RoadRunner services to accesstheir established provider.
The Federal Communications Commission continues to maintain its hands-off approach to the open access issue. But mounting pressure from current court cases in Portland, Ore., Pittsburgh and not Los Angeles may force the federal regulatory commission into action.
Debra Lathen, FCC cable bureau chief, confirmed this week that the FCC's position on open access is one of "vigilant restraint," during a recent Town Hall meeting in Los Angeles.
Lathen said that the FCC has decided not to mandate open access to broadband networks in order to get the high-speed technology deployed as quickly as possible.
However, Lathen said that if the FCC sees a monopoly developing, or if consumers are denied choice in the marketplace, or the FCC believes that a closed system is being built, their position might change.