3Com Settles 56K Class Action Lawsuit

3COM Corp. Tuesday agreed to settle a class action lawsuit over claims that it falsely advertised the performance of its 56K modems.


In a May 11 order from a California Superior Court, 3Com has agreed
to give a $15 rebate to anyone who purchased one of its X2 modems or
before May 31. The company will also offer a $15 rebate to users who
paid to upgrade an existing 3Com modem to X2 before February 28, 1998.

The rebate coupon is good toward the purchase of any new 3Com product with
a price of over $100. Class members have until February 22 of next year to
send in their coupons.

Attorneys representing the class claimed that 3Com and its US Robotics
subsidiary engaged in deceptive advertising by claiming that modems
employing x2 technology could achieve 56K speeds and/or were twice as fast
as prior generation modems.

In agreeing to the settlement, 3Com has vigorously denied any wrongdoing.

Because of line noise and other issues, 56-kbps modems from all
manufacturers rarely provide users with data transfer rates much higher
than 50 kbps, and most are limited to rates of 33.6 kbps on the upstream
side of the call.

As part of its settlement, 3Com has agreed to pay attorneys representing
the class for their fees and costs. The amount is to be determined by the
court, and is capped at $1.5 million dollars.

A hearing will be held on July 27 in San Jose to determine whether
the 3Com settlement is fair, reasonable and adequate.

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