Two class-action lawsuits were filed Tuesday on behalf of Time Warner Cable customers in 29 states to force the company to refund ill-gotten modem rental fees in violation of consumer fraud laws.

“It’s a massive hi-tech consumer fraud accomplished by low-tech methods,” said attorney Steven L. Wittels. “Send customers confusing notice of the fee in a junk mail postcard they’ll throw in the garbage, sock them with a $500 million dollar a year rate hike, then announce on your website that customer satisfaction is your #1 priority. That’s some way to deliver satisfaction.”

The context for the class action suit is that Time Warner Cable began imposing the fee Nov. 1 without giving customers appropriate notification. New York City residents had little more than two weeks notice in the form of a poorly printed postcard. Some residents in western New York and other cities have still not received notification from the cable company, either on bills or in the mail.

The two lawsuits were brought on behalf of Manhattan resident Kathleen McNally and Fort Lee, N.J. resident Natalie Lenett, but the suit asks the court to order refunds for all Time Warner Cable customers charged modem fees across their national service area.

The Consumerist thought the company’s failure to meet the timely notification requirement about the forthcoming modem rental fee might have the cable company dead to rights:

Pricing and Service Changes

Unless otherwise provided by applicable law, Time Warner Cable will notify you 30 days in advance of any price or service change. Notice of these changes may be provided on your monthly bill, as a bill insert, as a separate mailing, in the Legal Notice section of the newspaper, on the cable system channel(s) or through other written means.

But on closer examination, that provision only applies to pricing and service changes for Time Warner Cable’s television service, not broadband or home phone service.

In fact, Time Warner Cable’s new Subscriber Agreement has reserved the right to change just about anything it likes, just by updating the terms and conditions on its website:

We May Change our Customer Agreements

(a) We may change our Customer Agreements by amending the on-line version of the relevant document.  Unless you have entered into an Addendum that ensures a fixed price for a period of time (for instance, a Price Lock Guarantee Addendum), we may also change the prices for our services or the manner in which we charge for them.

(b) If you continue to use the Services following any change in our Customer Agreements, prices or other policies, you will have accepted the changes (in other words, made them legally binding).  If you do not agree to the changes, you will need to contact your local TWC office to cancel your Services.

(c) Any changes to our Customer Agreements are intended to be prospective only.  In other words, the amended version of the relevant document only becomes binding on you as of the date that we make the change.

One significant change Time Warner inserted in its Subscriber Agreement (the one printed in tiny print on tissue-thin paper, occasionally mailed with your bill) was deemed so important, it appears highlighted and in bold language:

Time Warner Cable now requires customers to submit disputes individually to binding arbitration, denying the right to bring or participate in any class action case. However, customers can opt-out of this provision simply by notifying the company through an online form. (You will need your Time Warner Cable account number.)

In practice, this would require McNally, Lenett, and millions of other customers to individually submit to a time-consuming arbitration proceeding — all to fight a $3.95 monthly fee. Few would bother. Wittels told The Consumerist the lawsuit still has merits because of other language Time Warner Cable maintains in its agreement which he believes holds the door open to a class action challenge.

Although customers are invited to purchase their own cable modem equipment to avoid the fee, the lawyers involved say the options are limited and expensive.

Time Warner Cable has expanded the list of modems approved for customer purchase. Buying your own cable modem will exempt you from the company’s $3.95/month modem rental fee, applicable to all but customers on special promotions or the elite Signature Home tier.

The Motorola SB6121 ($79) is back on the approved list, although customers intending to aggressively upgrade speeds as Time Warner introduces faster tiers may be happier with the Motorola SB6141 ($99), which supports more bonded channels than its lesser counterpart. The models from Netgear and Zoom were undistinguished in customer reviews — the Zoom for a noticeable number of reports complaining about the product’s short longevity and the Netgear for compatibility issues, poor quality control, and irritating customer/technical support.

Stop the Cap! continues to recommend the Motorola SB6141, which delivers top-rated performance and is future-proof with support for up to eight bonded data channels — 300Mbps service. Although still expensive on Amazon.com, increased competition has dramatically cut pricing on eBay at “Buy It Now” prices ranging between $86-100 at time of writing. This means no bidding hassles, no upfront sales tax, and free shipping for most buyers. The Motorola 6141 is what we use here at Stop the Cap!, acquired from an eBay vendor for $99. Now you can do even better.

Would you pay Time Warner Cable $6.99 a month to guarantee they will update your equipment on a regular basis to provide you with reliable service?

An unspecified number of customers participating in a Time Warner Cable focus group are being asked that question this month as the cable company ponders charging the new fee in the future.

“As technology, Internet speeds, and entertainment options keep getting better, you want, and need, your equipment to keep up. That’s why we’re introducing Time Warner Cable’s Future Proof Guarantee. Starting next month you will see a $6.99 equipment lease fee on your bill, which will guarantee you have the right equipment for all your TWC services. That means we will keep your Modem, and DVR set-top box up-to-date so you can enjoy a seamless, reliable experience and the service you expect.”

To be clear, Time Warner is only considering this new fee and is testing the concept with its focus group to gauge potential customer reaction.

The Stop the Cap! reader and focus group member who shared the news with us was not impressed.

“This feels like another money grab from an already very-profitable company,” our tipster told both us and the cable company.

The new fee would double-down on Time Warner’s already lucrative new cable modem rental fee, now $3.95 a month. The new $7 fee would cover “upgrades” that most subscribers might assume they were already entitled to as paying customers. We have no word if this fee would replace existing equipment rental fees or would apply in addition to those rental fees.

Any customer renting equipment can generally be assured of getting a free “technology upgrade” just by swapping existing equipment at any Time Warner Cable store — no additional fee required.

Rogers Communications customers equipped with DOCSIS 3 modems are getting free speed upgrades, some starting today:

• Ultimate: download speeds will increase from up to 75Mbps to up to 150Mbps (by the end of the year) (250GB limit);
• Extreme Plus: download speeds will increase from up to 32Mbps to up to 45Mbps (150GB limit);
• Extreme: download speeds will increase from up to 28Mbps to up to 35Mbps (120GB limit);
• Express: download speeds will increase from up to 18Mbps to up to 25Mbps (80GB limit).

Customers with DOCSIS 2.0 modems will need to acquire a new DOCSIS 3.0 modem and service plan to take advantage of the new speeds.

Remember, all Rogers Internet plans carry overlimit fees, some steep:

• Ultra Lite – $5.00/GB to a maximum of $100.00
• Lite – $4.00/GB to a maximum of $100.00
• Express – $2.00/GB to a maximum of $100.00
• Extreme – $1.50/GB to a maximum of $100.00
• Extreme Plus – $1.25/GB to a maximum of $100.00
• Ultimate – $0.50/GB to a maximum of $100.00

Our regular Canadian reader Alex Perrier reminds us that “faster speeds mean faster drain of [your] usage allowance.”

Moffett

I spend my days listening to Big Telecom company earnings conference calls so you don’t have to. On this morning’s call with Time Warner Cable investors, Sanford Bernstein’s Craig Moffett raised his hand yet again for another round of questioning Time Warner Cable executives for news on when the company will begin gouging their customers with Internet Overcharging schemes like usage-based billing. It is rare when Moffett does not ask Time Warner about when it plans to get the Money Party started with even higher prices for the company’s broadband customers.

Both Rob Marcus (chief operating officer) and Irene Esteves (chief financial officer) do their best to assuage Moffett his dreams of usage pricing may still someday come true (we’ve underlined some important points):

Craig Moffett – Sanford C. Bernstein & Co., LLC., Research Division: Rob or Irene, maybe you could just update us a little bit on your latest thinking with usage-based pricing, what’s been happening in Texas? And with the cable modem fee, which is obviously not a step in usage-based pricing, does that put off anything that you would otherwise do in moving toward usage-based pricing over the next couple of months? How should we think about that?

Robert D. Marcus – president and chief operating officer: So we’re now in Texas, the Carolinas and the Midwest with usage-based pricing. [We’re planning to introduce it] in the Northeast [in] the next month or so. And I think by year-end, we’ll be 100% across the footprint with [usage pricing] available [on] Internet Essentials, as we call it. I think that although the customer uptake of Internet Essentials is still small, it’s a very important principle that we’ve established, one that usage and price relate to one another. And secondly, we think it’s very important that we give customers who use less a choice to pay less. And whether or not there is a significant uptake of the service, we think those are very important principles to have established. So we’re in no way reducing the emphasis on that product because the numbers are still relatively small.

Irene M. Esteves – chief financial officer and executive vice president: And as far as the modem fee, we’re looking at that as part of our overall pricing strategy on [High Speed Internet]. We shouldn’t think about it as separate and apart from what our customers are paying us for the overall service. We think  it makes sense given what the competition is charging.