November 15, 2012

Angry customers sue Time Warner over modem fee

A new $4 monthly charge has rankled subscribers and led to two class-action lawsuits claiming it violates the customer contract.

By Ray Routhier
Staff Writer

For Cindy Peterson, the notice in October that she had to start paying $3.95 a month for a Time Warner Cable modem that she's had in her home for years was the last straw.

"I had had it with them," said Peterson, of New Gloucester. "I was paying about $122 a month (for cable TV and Internet). They keep raising the price, and it just wasn't worth it to me. So I switched (to other providers), and now I'm paying about half."

Time Warner's decision to start charging for modems that it previously provided for free did more than rankle Maine customers like Peterson. It prompted two national class-action lawsuits.

The lawsuits, filed in New York and New Jersey this week, claim that Time Warner's new charges, which took effect Nov. 1, are illegal because they violate the company's own contracts with customers.

Lawyers for the plaintiffs estimate that Time Warner is generating $40 million a month with the new modem fees.

The main issue, says lead lawyer Steven L. Wittels of New York, is that the company didn't follow its own contracts with customers and didn't give 30 days' direct notice to all 10 million or so customers who were affected.

The lawsuits, with lead plaintiffs in New York and New Jersey, are filed on behalf of customers in states where Time Warner operates, including Maine.

Wittels said he welcomes more Time Warner customers from around the country to contact him about joining the lawsuit.

He called the modem "lease" payments "massive high-tech fraud accomplished by low-tech methods" because the company sent postcard notices of the new fees to some customers, hoping they would throw them away or be too confused to pay close attention.

Andrew Russell, a Time Warner spokesman in Maine, said the company would not comment on legal action. He also would not say how many customers in Maine have modems.

In July, when Time Warner was in a contract dispute with a network provider, the company said it had more than 360,000 subscribers in Maine who received TV, phone or Internet service.

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