Motorola cable modem

A California federal judge has thrown out most of a class action lawsuit that charged Comcast with marketing broadband service plans without disclosing extra fees for cable modem equipment.

The head plaintiff, Athanassios Diacakis, claimed Comcast sold Triple Play promotions over the phone and in the media without mentioning customers would also have to pay additional fees to lease a cable modem.  Diacakis accused the cable operator of violating California’s tough false-advertising laws by not fully disclosing all fees and surcharges while explaining the promotion.

U.S. District Judge Saundra Brown Armstrong disagreed, however, dismissing most of the plaintiffs claims.  The judge didn’t declare Diacakis’ claims untrue, but ruled they were insufficiently documented to proceed to trial.

“The [amended complaint] fails to specify when or where Comcast advertisements were viewed, the content of those advertisements, or which of them in particular Plaintiff relied upon,” Armstrong wrote.

Diacakis is free to submit an amended complaint if he wishes to proceed with his class action case.

Comcast charges customers $7 a month to lease cable modem equipment, but invites customers to purchase their own cable modems to avoid rental fees.  Many customers do just that, choosing from several dozen approved models Comcast will provision for broadband customers.  The cost to purchase cable modem equipment ranges from $50-125 on average, depending on the cable modem selected.  It takes less than two years for purchased cable modems to effectively pay for themselves at Comcast’s current rental rate.

At a time when cable television rates continue to spiral upwards in excess of the rate of inflation, Time Warner Cable’s interest in spending several billion dollars to acquire a professional baseball team seems strange.

The Los Angeles Times reports the cable giant is considering buying the Los Angeles Dodgers at a price that could exceed $2 billion.  It would compliment two new regional sports cable channels Time Warner plans to launch in southern California featuring the Los Angeles Lakers.

Time Warner Cable Sports president David Rone confirmed the cable company has a strong interest in carrying the Dodger games.  Purchasing the team outright could be much easier (and eventually cheaper) than negotiating against competing broadcasters and cable networks just to acquire the airing rights.

But at the same time customers are facing higher cable bills after the latest round of rate increases, it is ironic a cable operator complaining about programming costs and expenses would suddenly be willing to part with billions for a single baseball team.  For New York sports fans coping with the loss of MSG, sports programming Time Warner calls too expensive, it could prove counter-productive to complain about the cost of sports on the east coast while considering a $2+ billion purchase out west.

Time Warner Cable customers in southern California face substantial rate increases in 2012, including a budget-busting $49.99 service call fee to install increasingly expensive cable service.

The bad news is arriving in customer bills this month, with substantial price hikes for cable television —  including a 27.4% increase for the package that only includes local broadcast channels.  Time Warner Cable blames increasing programming costs for the rate increases, which are several times higher than the official rate of inflation — 3.5%.  Most customers with bundled television, telephone, and Internet service will see a smaller increase on the magnitude of a few dollars, but for those picking and choosing only a few items from Time Warner’s menu, the price tag for individual services will be higher.

The largest rate increase comes when the cable company sends a truck to a home or business.  Time Warner was charging $32.99, but will now charge $49.99 — a 51.5% increase.  The cable company has also been pushing its home networking Wi-Fi option, and will now charge $69.99 to install it, up from $49.99.

Time Warner Cable spokesman Jim Gordon tells the Los Angeles Times not everyone will pay those prices.  Certain promotions may lower those rates, or waive them altogether.  But the company offered little explanation to justify such a major price hike.

One of the cable company’s competitors, DirecTV, scoffed at Time Warner’s rate increase, noting the satellite company only raised prices an average of 4% earlier this year, and anticipates a similar increase in 2012.

The effect of the latest round of rate hikes is likely to drive even more customers to cancel or cut back on cable services.  An increasing number are dropping cable television service altogether, relying on broadband for video entertainment.  The cable industry’s response to cord-cutting has been a combination of increased online viewing options for cable-TV customers and usage caps and overlimit fees on broadband that either discourage online viewing or attempts to profit from it.  Time Warner Cable executives said as recently as December they plan to eventually introduce “usage based billing” of Internet service “the right way rather than quickly.”

While AT&T endures zoning-related delays to build out its fiber-to-the-neighborhood service U-verse, a scrappy anti-cap, pro-speed Internet provider in Santa Rosa has announced its intention to deliver gigabit speeds to San Franciscans over a fiber-to-the-home network that will begin construction early next year.

Sonic.net has been providing broadband services for years in northern California, using AT&T’s network of phone lines to deliver unlimited 20Mbps DSL service (including a phone line) for $40 a month.

Sunset District, San Francisco, Calif. (Courtesy: Stilfehler)

Now the company is branching beyond traditional DSL into fiber optics.  Sonic.net has already completed the first phase of its gigabit fiber network in Sebastopol, where it advertises 100Mbps service for $40 a month and 1000Mbps for $70 a month, both including phone service at no extra charge (two lines for the 1Gbps plan).

In San Francisco, Sonic plans to start with 2000 homes in the Sunset District, expanding its network to fully cover the city within five years.

Such a network could deliver serious competition to Comcast and AT&T, the currently-dominant providers.  AT&T’s U-verse buildout has been stalled over the need to install 768 large, unsightly metal cabinets on San Francisco street corners.  The company, as late as this summer, remains mired in zoning disputes and public protests.  Sonic’s fiber network will require similar equipment, and the San Francisco Chronicle reports Sonic filed its own application with the city Department of Public Works to install 188 cabinets, measuring 5 feet tall, starting next year.

Sonic may have a better chance if only because it does not have AT&T’s less-than-stellar reputation among some residents and customers who have been upset with the company’s wireless performance, and ongoing battles over cell tower placement.  Sonic.net CEO Dane Jasper tells the Chronicle:

“There is a huge demand in San Francisco for higher bandwidth services, and fiber is the only long-term way to meet this demand,” he said.

Given the fact that the company’s all-fiber network will bring “the fastest and cheapest” broadband service to the city, Jasper says he thinks the chances of overcoming the obstacles experienced by his larger rival are “pretty good.”

Sonic.net has gained a reputation for excellent customer service and vociferously opposes usage caps and other Internet Overcharging schemes.  The company has attracted the support of Google, which is using Sonic to manage its gigabit fiber network on the campus grounds of Stanford University in Palo Alto.

AT&T has previously dismissed fiber to the home service as too costly to provide, and has adopted in its place a fiber-to-the-neighborhood system that relies on traditional home phone wiring for the last part of its network.

Last month, Stop the Cap! shared with you the inside story of the ABC Plan — a self-serving attempt by large phone companies to reform the Universal Service Fund (USF) in ways that would raise phone bills and deliver favored treatment for slow speed telephone company DSL service.  The FCC elected not to adopt the industry plan and cobbled together one of their own.  It will still raise the cost of telephone service, and likely won’t bring broadband to every rural American who wants it, but it could have been worse.

Despite the reforms, the challenges to deliver rural broadband remain serious.  In these out of the way communities, cell phone service is hit or miss, cable television is nowhere to be found, and the community looks to their independent local phone company for just about every telecommunications service they can buy.

In areas deemed unprofitable for even voice telephone service, co-op phone companies are commonplace.  So are family-owned and operated private providers.  These small providers don’t just exist to make money.  They are one-part community service, one part cover-your-costs to keep the lights on.  Without support from the USF, many of these companies could never have sustained their operations, much less expand into broadband.  So in a world of AT&T, Verizon, and CenturyLink, there are rural phone companies like Bevcomm, Valley Telephone Cooperative, Volcano Communications, Blackfoot, and Grand River Mutual Telephone that are expanding broadband in places larger companies would never think of serving.  While some of these companies supported the ABC Plan, the rural telephone associations that helped underwrite the Save Rural Broadband campaign also had a plan of their own to protect these small phone companies.

Over the next several days, you can get an inside look at each of these communities and the providers that serve them.  They are the rural phone companies that deliver the innovation so many larger phone companies forgot.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Save Rural Broadband California.flv[/flv]

Learn how people in Amador County, California rely on broadband services from Volcano Communications.  Cell phone service is non-existent and without telecommunications service like broadband, economic growth in the community would be seriously challenged.  (6 minutes)