Time Warner Cable Modem Fee Is "Hi-Tech Consumer Fraud," Lawsuits Allege

http://gothamist.com/2012/11/13/twc_modem_fee_is_hi-tech_consumer_f.php

by boh • 14 years ago

51 53 14 years ago

beaker52• 14 years ago

tl;dr Time Warner decides to begin charging existing customers a rental fee for existing (previously free?) broadband equipment.

DannyBee2• 14 years ago

Well, not only that, but there is no real justification, since, as the lawyer pointed out, these modems were likely expenses that were written off long ago.

If correct (and i'd be surprised if it wasn't), they really aren't charging them for anything that time warner is actually paying for themselves.

pyre2• 14 years ago

At this point, they're probably using it to subsidize the lawyer costs of this pending lawsuit. :P

gav• 14 years ago

I called up TWC to complain as I figure that after 2 years of service they've more than covered the cheap RCA modem they gave me. I was told that some customers were paying $2.50 and some were paying $0 so they were going to charge $3.95 to make it fair. They also pointed out that sometimes the modems break so they are on the hook to give you a new one, which is why the fee is reasonable.

The list of approved modems is here: http://www.timewarnercable.com/en/residential-home/support/t...

Checking today the list is a lot more reasonable, when they first released the news they would only support the SBG6580 (~$135) and SB6141, which nobody seems to carry. The SB6121 is around $80.

I'm still confused why they'll lease me a cheap DOCSIS 2 modem but expect me to buy an expensive DOCSIS 3.

pyre2• 14 years ago

  > I'm still confused why they'll lease me a cheap
  > DOCSIS 2 modem but expect me to buy an expensive
  > DOCSIS 3.

It's pretty simple. If the alternatives are all $80+, people will be less likely to buy them, and will just bend over to take the new monthly fees.

It's sort of an 'illusion of options.' They'll give you options, but make it as inconvenient as possible in order to discourage too many people from exercising them.

DannyBee2• 14 years ago

This would be a great argument on their part, except for the fact that RCA/et al are probably on the hook for replacing the modems (it's not like time warner is buying them at retail), so time warner loses no real money. If it's service/support cost, they could simply charge a nominal broken modem fee of $5 or whatever and call it a day.

There is probably no scenario in which charging an extra 3.95 a month is anything but "profit" for time warner.

wmf• 14 years ago

I'm still confused why they'll lease me a cheap DOCSIS 2 modem but expect me to buy an expensive DOCSIS 3.

From everything I've read this is not the case. If you are on a slower plan you can use a DOCSIS 2 modem. It is interesting that they won't let you buy the same model that they rent to you, though.

moepstar• 14 years ago

This whole rent-the-router/modem-you-absolutely-need-to-use-our-service is getting more and more popular.

Here in Germany one big cable-ISP (Kabel Deutschland), while not charging for the modem itself, wants you to fork over for enabling WiFi on it.

_Enabling_ it via firmware, mind you. Every modem has the hardware capability, however depending if you fork over the 5€ per month they'll enable or disable it via forced firmware updates.

Sadly, it seems the days where you got a subsidized router for a certain percentage of the retail cost with your contract, as it was for almost all telcos a few years ago, are gone :(

TkTech• 14 years ago

These are easy to circumvent almost without exception. I have a cable modem that disables bridged mode unless you "ask nicely" and get a firmware update to enabled it. The solution was simply to modify the form being submitted, since the change in the firmware was purely adding an <option/> to the template!

stumm• 14 years ago

Time warner also charges you to enable the wifi.

subway• 14 years ago

I recently signed up for services with Insight (owned by TWC), and was told while I'm permitted to bring my own modem, they require I take delivery of their "free" modem when service was installed. At the end of the signup process they required I agree to a 1 year commitment on the service. When I asked why this 1 year commitment was required, the response was "Because we're giving you a free modem".

Brilliant.

wjamesg2• 14 years ago

Same experience with Insight here (KY, USA). Since Time Warner recently bought out Insight, I wonder how that is affecting things like fees. I've been experiencing some connectivity issues lately as well, like they are imposing changes on the network (throttling?).

Related: Elsewhere (FL, USA) I was able to avoid fees by providing my own modem for a residential account (Comcast cable internet). Apparently, though, this is not an option for business accounts which require a modem rental (why?)

FireBeyond• 14 years ago

Comcast Business uses a modem with custom firmware that provides, among other things, a Management Interface for remote management, and specific support for multiple static IP addresses behind the modem.

georgemcbay2• 14 years ago

The kicker to this is that you probably can't return the modem because that would be a change in service. I agreed to a one year plan with them with a couple of DVR settop boxes, after a few months I realized I never used one of the DVRs and attempted to return it only to be told that I can't return it without that being essentially an early termination of my entire current plan resulting in fees greater than what I would save by not "leasing" that DVR for the remained of the time period.

This is one of many interactions I've had with Time Warner that have caused me to boil with rage, and as soon as some viable alternative ISP is available to me I'm switching and never looking back.

bnycum• 14 years ago

Our Comcast modem fee went from $0 -> $3 -> $5 -> $8 in a years time between 2010-2011. No notice on 2 of those fee changes. Once it finally reached $8 last year I bought my own Docsis 3 modem for ~$70 and gave back the Docsis 2 rental they gave me. Glad someone is getting them for their highway robbery.

X-Istence• 14 years ago

When I signed up for my Comcast internet I looked at the cost of modem rental, and then looked at the price of a modem. If I use the modem for 1 month more than a year, I have paid less.

Easy proposition at that point.

ta12121• 14 years ago

RCN, on the other hand, simply raised my rate without even apologizing. They pretended to give me a promotion of "increased speed" and then the promotion "expired" and my rate went up. And oops, the old speed and old rate was no longer being offered.

jedberg• 14 years ago

About two years ago I signed up for UVerse. There was no modem fee. 6 months later, there was a $2 fee. Six months again, $4. And then 6 months later it was $6.

At that point I actually noticed the fee (I hadn't really looked before that) and so I went in to complain. Here was basically my conversation:

Why did you raise the modem fee in January?

Because we hadn't raised it in a while?

Did you give me better service?

No.

How do you justify raising the fee on old equipment?

Because we hadn't raised it in a while.

But my equipment is getting older and less valuable

Oh, is your modem broken? Do you want a new one?

No! I just want to know how you justify raising the rates on equipment that is unchanged on service that is unchanged. You raised your rate and provided no additional benefit to me and your costs actually went down.

Because we hadn't raised it in a while.

That's when I left.

potatolicious• 14 years ago

To be fair, a front line customer service agent is probably an unreliable source of corporate strategy, or really anything in general. In fact, I'm quite sure Comcast customer service can make Mother Theresa herself look like an evil megalomaniac.

seiji• 14 years ago

That's the brilliance though. The TSA, customer service, and every other wish-they-could-be fascist organization operates by distancing enforcement from policy decisions.

Every try debating a TSA agent about how many explosive shoes they've seen in their careers? They just have a job to do. They aren't allowed to think -- they just follow their state diagram. "Shoes on? Yell until shoes come off. Why? Because that's what the chart says."

debacle3• 14 years ago

While I know what you meant, Mother Theresa is a bad example.

http://en.wikipedia.org/wiki/Criticism_of_Mother_Teresa

67726e• 14 years ago

I'm probably missing some details, but what exactly makes this a scam? I completely agree that charging some fee like $7/month (how Comcast does it where I live) is absurd, but how is it a scam? One can always buy his/her own modem and not have this fee. At what point does the consumer need to be responsible for his/her own decisions?

ceejayoz• 14 years ago

They get these things for probably $20 wholesale, and they often sit in peoples' basements for 5+ years.

Meanwhile, rate hikes in many areas are regulated by state/local governments, so it certainly looks like a way to raise revenue without triggering government reviews.

AJ007• 14 years ago

The story seems light on details, I am guessing by your post you didn't really read it, but it seems to me like the way they added the fees break specific consumer protection laws.

If I am already in a contract, and the company alters the price on me during that contract period, how was I capable of making a decision?

The right answer is that the other side broke the contract and voided it, but if it was through a "confusing notice of the fee in a junk mail postcard they’ll throw in the garbage" then I may have missed the window to politely exit the contract.

Then again, if I went to all of the trouble waiting for a cable man to show up and install my new cable, only to have the price altered a few months later, they have not only wasted my time but also set themselves up for a potential run in with the FTC by advertising something as $XXX a year which really turns out to be $YYY a year. Price differences are often what make a consumer choose one service over another so it most certainly matters in that regards.

Karunamon3• 14 years ago

>confusing notice of the fee in a junk mail postcard

    <post type="devils-advocate">

There's nothing "confusing" about the wording on the postcard. If you get something that's very clearly from your cable company and you chuck it in the trash, you are (and should be) responsible for the consequences of not reading it. It could be a bill, a disconnect notice, or any number of things.

That's not even getting into the fact that it's a backdoor rate raise, but cmon. There's nothing sneaky about it as far as the customer is concerned.

wjamesg2• 14 years ago

In my experience, one can not always buy his/her own modem. I was required to rent one for a Comcast Business Class internet account, specifically informed that I could not provide my own modem.

illuminate2• 14 years ago

http://arrisi.com/consumer/_docs/ARRIS_Modems_Comcast_Xfinit...

It seems if you push enough, they'll give up the model/brand that they support and provision.

Wilduck• 14 years ago

This is reminiscent of phone rentals that used to be routine when using a landline. Eventually most consumers ended up buying their own phones, but there have been instances reported where companies happily continue charging their less savvy customers [1].

This is definitely unethical. It's even more frustrating when you're in an area where there's a telecom monopoly and you're essentially forced into accepting these twisted business practices. Is this something that should be outright outlawed?

http://articles.nydailynews.com/1995-08-20/news/17982976_1_p...

yardie• 14 years ago

My grandmother is an in home nurse. One of her clients passed away a few years ago. She still had the Ma Bell bakelite phone and was still paying $15/month to rent it. Considering that she was 95 when she passed and probably retired around 60 that is one hell of a lease.

I imagine there is some small group of near-retirement ATT employees processing these payments every month in some dark basement somewhere.

mturmon• 14 years ago

$15/month * 12 months/year * (95-60) years = $5400

The lease for just one year is $180.

JagMicker• 14 years ago

I have two experiences with Time Warner Cable to share:

- TWC refuses to offer "wideband" service with a static IP. If you want a static IP, you must pay for TWC "Business Class" (>$99/mo.) for speeds much slower than with Wideband.

- Forgot to pay my bill one month. Some TWC employee stops by my office and tapes a flyer to the door. It basically says to call him or he will be the person who disconnects my service. I call him. He wants nothing less than my credit card number. Says I have to 'go through him' or it'll cost me an extra $100 and he'll disconnect me anyway. It seemed very sketch. I called the main TWC number and told my story. They asked me to fax a copy of the flyer I found on my door. After a couple of weeks of calls back-and-forth with one of the 'higher-up' billing people, I'm finally told that they had no idea an employee was going door-to-door and posting those flyers. Apparently, he made the flyer himself. I was never told any more about it, but the whole thing seemed very strange and was the start of me loosing faith in TWC. I now think even less of TWC because of their negative reactions to Google Fiber. I think that TWC cares about one thing, & one thing only --- profit. I hate to say it, but they are worse than Comcast (but not DirectTV [1])!

1. Washington State Attorney General's Office - complaint against DirectTV: http://atg.wa.gov/uploadedFiles/Home/News/Press_Releases/200...

driverdan• 14 years ago

> I think that TWC cares about one thing, & one thing only --- profit.

You do know TWC is a business right?

krob• 14 years ago

I wish California filed one of these law suites. I have on my credit from my fathers purchase using my name -- who subsequently died obtained a subscription for DirectTV, they delivered and installed 1 dvr, and 3 receivers, they charged to my profile non-payment of $950 cancellation fee. My father never even used the DVR, I guess he didn't know how to use it. Ugh!

Osiris2• 14 years ago

I used a cheap $20 DOCSIS 2 Cisco cable modem with my Comcast service. That's compared to the rental fee of $3 a month. When I switched to DSL they wanted $100 for the modem or a $6/mn charge. I went to Craigslist and found someone selling the exact same DSL modem for $35. Despite having gigabit ethernet and wifi I just put it into Bridge mode and use my own routers and switches where I can use TomatoUSB firmware.

I'll never rent or buy a modem from an ISP again.

debacle3• 14 years ago

This isn't about you and me. It's about the million other subscribers that TWC or Verizon or Comcast are bilking to the tune of millions of dollars a year.

Osiris2• 14 years ago

I was trying to point out how ridiculous the prices they charge are for everyone and that it's a total rip off. Unfortunately, most people don't know any better and they make it really hard to not get charged for "Professional" install.

logn• 14 years ago

TWC wanted to charge me $500 or so if I didn't return my modem. I had to get to a return point on the other side of town (in LA!) between 9-5 Mon-Fri.

Compare that to ATT who would charge me $100 and allowed me to return it with a prepaid FedEx sticker in the box it came in.

binarycrusader• 14 years ago

Comcast Business Class pulled this little stunt around the same time as well.

But unlike Time Warner, they already had a vague statement in the contract saying they could change the fee charged for the cable modem at any time.

They seemed to not understand that regardless of whether it was in the contract, silently taking my continued paying of the bill (which most customers are on auto payment) as agreement to their new fees is a completely unethical way of doing business.

Real notification means calling me personally and letting me know; not just adding the fee to my bill and taking my automatic payment of it as acceptance.

If they would have given me a new modem, I could see the fee being justified. But I had already had their service for almost two years before they decided to start charging for it.

In fact, when I originally signed up, I was told that the reason the modem was free (and there was no monthly fee) is because I signed up for a contract.

Totally bollocks.

cloverich• 14 years ago

Am I the only one that doesn't think this is a big deal?

I get cable through TWC, and it is far and away the worst ISP experience I've ever had.

However, equipment lease'ing seems like a completely legitimate practice; the 'backdoor' charges have always been clearly itemized on my bill (and explained up front), and were removed when I purchased my own cable modem without any hassle. Furthermore, if TWC bills ahead (its their practice here), that itemized bill should come with enough time to purchase your own and avoid the charges altogether.

If the charges arren't itemized, or if they force you to use their equipment, I can see a point. Is that the case?

georgemcbay2• 14 years ago

I'm on Time Warner because where I live there is no viable alternative. After they added the modem rental fee, I went out and bought my own cable modem (I highly recommend doing this, with the current fee your own modem will pay for itself within a year). I brought back my old modem, switched the service to use my new modem and thought that was the end of it.

The bill for the month when I was transitioned had a prorated modem lease fee, so that was good, but the next month had a full modem rental fee charge! I noticed this on the bill and called customer service and they adjusted the charge and said it won't appear in the future, but if you bought your own modem like I did, beware of the possibility of them continuing to charge you the fee.

patmcguire• 14 years ago

This is so they can lie about prices in advertisements. Time Warner offers internet for $40 a month, it just happens to cost $48.

Time Warner Cable Modem Fee Is "Hi-Tech Consumer Fraud," Lawsuits Allege

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