Time Warner Cable Sued Over Cable Modem Fee

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Time Warner Cable has been hit with two-class action lawsuits over the $3.95-per-month modem rental fee it recently began charging customers. The actions, filed in the Superior Court of New Jersey and the Supreme Court of New York, charge that TWC did not give customers the 30-day notice of the fee required under existing terms of service, and failed to inform subscribers that digital voice and other advanced services wouldn't work with third-party purchased or rented modems.

The two suits ask the courts enjoin the company from imposing the fee, which took effect Nov. 1.

TWC has said the fee, similar to what many other cable operators charge, will raise money that can be used to improve its infrastructure and services. Some customers label it a rate hike masked as a rental fee.

TWC advised customers that they could buy their own modem, but should only use approved Motorola devices. The Motorola units are more expensive than other modems, the suits claim. Additionally, the MSO didn't inform customers that alternative modems would not accommodate triple-play services, so that they could no longer receive voice-over-IP service.

TWC Chief Financial Officer Irene M. Esteves told analysts last week that roughly 3 percent of the company's HSD customers have purchased their own cable modem since the company instituted the rental fee, but that overall reaction to the fee has been muted.

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