The Netgear CM700 is the target of a class action lawsuit filed in California.

As consumers increasingly spend money out-of-pocket to acquire their own cable modems to avoid leasing fees, alleged defects in those modems are spurring class action lawsuits to force manufacturers to fix the problems or issue refunds.

Two separate class action cases have been filed this month in Calfornia courts alleging “serious defects” in the Netgear CM700 and Arris SURFboard SB6190 — both newer DOCSIS 3.0 modems. But those modems are not the only ones affected by a serious firmware bug that can dramatically degrade internet performance.

Both modems rely on a relatively new Intel Puma 6 chipset, which some media outlets have also implicated in similar defects in a variety of cable modems including the Hitron CGNV4, the Compal CH7465-LG, and Puma 6-based modems like Virgin Media’s Hub 3 and Comcast’s top-end Xfinity boxes. Other newer modems branded by Linksys and Cisco also use the same system-on-chip and may also be affected.

The law firm of Schubert, Jonckheer & Kolbe, which is handling the Netgear legal case, says these cable modems may be affected:

• Arris SB6190
• Arris TG1672G
• Arris TM1602
• Super Hub 3 (Arris TG2492LG)  (commonly, Virgin Media)
• Hitron CGN3 / CDA / CGNV series modems:
• Hitron CDA-32372
• Hitron CDE-32372
• Hitron CDA3-35
• Hitron CGNV4
• Hitron CGNM-3552 (commonly, Rogers)
• Hitron CGN3 (eg CGN3-ACSMR)
• Hitron CGNM-2250 (commonly, Shaw)
• Linksys CM3024
• Linksys CM3016
• TP-Link CR7000
• Netgear AC1750 C6300 AC1900
• Netgear CM700
• Telstra Gateway Max (Netgear AC1900 / C6300) (Australia)
• Cisco DPC3848V
• Cisco DPC3941B / DPC3941T  (commonly, Comcast Xfinity XB3)
• Cisco DPC3939
• Compal CH7465-LG / Arris TG2492LG (commonly, Virgin Media Hub 3)
• Samsung Home Media Server

Customers of Comcast, Charter, and Cox in the United States are impacted, as well as Rogers and Shaw customers in Canada and Virgin Media in the United Kingdom. The faster your internet connection, the more likely you will notice the defect, which causes dramatic latency spikes and degraded internet performance.

Intel admitted there was a problem back in December, but ISPs have been slow to respond.

Intel acquired the Puma family of chips from Texas Instruments in 2010, and the latest — the DOCSIS 3.0-compatible Puma 6 – uses an Atom x86 processor designed to handle up to 1.6Gbps connections. Unfortunately, the engineers who developed the firmware have tasked the Atom CPU with too much work while it also copes with processing network packets on a high-speed internet connection.

As The Register reported back in December:

Every couple of seconds or so, a high-priority maintenance task runs and it winds up momentarily hogging the processor, causing latency to increase by at least 200ms and, over time, about six per cent of packets to be dropped. It affects IPv4 and IPv6 – and it spoils internet gaming and other online real-time interaction that need fast response times.

This problem is easily seen in two graphs provided to the Register by a reader in Phoenix who plugged in two different modems to his Cox Cable internet connection. The blue lines represent latency and the red lines are packet loss. The test was performed with an ICMP ping running 33 times a second to his ISP’s DNS server over a 30 minute period.

An Arris SB6183 cable modem using an older Broadcom-based chipset exhibits no problems. (Image: The Register)

The Arris SB6190 running the new Intel Puma 6 chipset shows significant and readily identifiable problems. (Image: The Register)

Online gamers are among the most likely to be affected by latency problems.

“I excitedly swapped out my Arris SB1683 Broadcom modem for the new SB6190 Intel one expecting gigabit performance and immediately noticed slower webpage loads,” one gamer told The Register. “During first-person gaming, I was getting killed way more often for no apparent reason. I looked at an eight-year graph of latency from my home logs, and was horrified. Swapping back to my SB6183 solved all the issues.”

Arris also confirmed the problem.

“Arris has been working actively with Intel to address the issue, which resulted in some SURFboard SB6190 users reporting latency concerns,” a spokeswoman for Arris said. “We plan to quickly issue Intel’s firmware updates to resolve any latency. We remain committed to providing the best broadband experience for all users of Arris devices and regret any inconvenience this issue caused.”

Unfortunately, regardless of how fast modem manufacturers issue updated firmware to resolve the problem, end users will not notice a difference until their cable operator pushes that firmware update to customers. You cannot update cable modem firmware on your own, and any effort to do so would be futile because your provider would automatically replace it with an older “approved” version as soon as the unauthorized firmware change was identified.

The lawsuits seek a jury trial and damages forcing the manufacturers to recall the modems and either replace them or issue refunds to all affected customers. Customers who own an affected modem who want to participate in the class action case can fill out this form for more information.

If you are or were a Cablevision cable-TV customer, the cable company may owe you up to $140 for overcharging you for their set-top box, but only if you ask.

Current and former subscribers in New Jersey, New York, and Connecticut will share the proceeds of a settlement fund proposed in federal court in response to a class action lawsuit (Marchese v. Cablevision Systems Corp.) that alleged Cablevision has been misrepresenting the need for its cable equipment dating back to 2004.

You probably qualify as a class member if you had cable television service and a Cablevision set-top box anytime between April 30, 2004 and March 9, 2016. Former subscribers will likely receive a check valued at $20-40. Current customers will be offered the option of a one-time bill credit of $20-40 or the opportunity to get free services from Cablevision valued at $50-140. The longer you’ve been a customer, the higher the value of the free services you may qualify for, including free premium movie channels or multi-room DVR service. If you already have both, you will only qualify for the bill credit.

Customers should register as a class member to guarantee a share of the settlement proceeds. Visit cableboxsettlement.com to register online, e-mail [email protected] or call 1-888-760-4871. The deadline to file a claim is Sept. 23, 2016.

The proceeds of the settlement will likely be distributed by the end of this year, after a fairness hearing scheduled for September to discuss the requested attorneys fee, estimated to be as high as $9.5 million.

As is often the case in class action lawsuits, the company being sued need not admit any wrongdoing, and Cablevision is proclaiming its innocence.

“Cablevision denies all of the claims and allegations in the lawsuit and notes that the settlement is subject to final approval of the court,” a company statement said. “We cannot comment further beyond the publicly available filings in the litigation.”

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 and Comcast are facing class action lawsuits filed in California federal court alleging both cable operators retain Social Security numbers, credit card information and contact information after customers stop doing business with the companies.

The two lawsuits claim Comcast and Time Warner Cable are in violation of the 1984 Cable Communications Policy Act which, among other things, requires cable operators to “destroy personal information when it is no longer needed for the purposes for which it was collected (and there are no pending requests for access).”

According to the plaintiffs, both companies are retaining personal information about their ex-customers indefinitely, and are not sending required annual privacy notices to former customers disclosing this fact.

The CCPA allows individuals to collect $100 for each day the cable company is in violation of the law.

The lawsuit argues that this non-essential information exposes former customers to possible identity theft or illicit action by company employees that could potentially lead to unauthorized charges or account withdrawals.

That fear is not far-fetched. Just two weeks ago, GCI — a cable company in Alaska, found itself contacting at least 400 customers who had their personal financial information stolen by an employee.  Some customers were also contacted by their credit card issuers over incidents of unauthorized credit card charges.

[flv width=”512″ height=”308″]http://www.phillipdampier.com/video/KTUU Anchorage GCI Warns Customers of Fraud 5-24-12.mp4[/flv]

KTUU in Anchorage reports a GCI employee accessed cable customer account information to commit identity theft and credit card fraud.  (3 minutes)

Not really

Back in 2002 Vincent and Liza Concepcion walked into a southern California AT&T Mobility store to purchase new cellphones for themselves.  AT&T advertised a buy one, get one “free” offer for cellphones.  What AT&T didn’t say was that the family would end up paying more than $30 in hidden sales taxes for both phones.

More than eight years later, that purchase — and the resulting class action lawsuit it launched — threatens to sweep away important consumer protections by letting corporations ban class action cases and curtail Attorneys General from enforcing state consumer protection laws.

Oral arguments in the case AT&T Mobility v. Concepcion were heard before the U.S. Supreme Court last Tuesday in one of the most important consumer protection cases in decades. At issue is this clause, inserted into the Concepcion’s service contract with AT&T that would disallow the family from participating in a class action lawsuit:

“You and AT&T agree that each may bring claims against the other only in your or its individual capacity, and not as a plaintiff or class member in any purported class or representative proceeding.”

That clause clashes with several state laws, California’s included, which basically say consumers cannot be compelled to sign away their basic consumer protection rights.  California law also says some contracts can be considered unenforceable ‘if they are built on deception, are too-one sided, or violate broader public policy.’

Hello, AT&T.

Vincent and Liza, through their attorney, argue that bringing an individual lawsuit against AT&T over $30 in sales taxes would be crazy — no lawyer would take the case and no plaintiff would front a retainer well beyond the amount in dispute.

As Justice Ruth Bader Ginsburg wrote in another class action case, “The realistic alternative to a class action is not 17 million individual suits, but zero individual suits, as only a lunatic or a fanatic sues for $30.”

The “class action” concept provides at outlet for aggrieved consumers who can attract legal representation if a company can be sued on behalf of every impacted customer.  For AT&T, that could mean facing not just the Concepcion family, but millions of Californians — each charged sales taxes for phones the company advertised as “free.”

How AT&T’s Case Has Broadened Into a Major Dispute Over Arbitration vs. Class Action Lawsuits

It's easy to navigate AT&T's terms and conditions to achieve a good outcome from arbitration, right?

But what began as a legal argument over a “free” phone has broadened into a much larger legal case before the Supreme Court: can consumers be compelled to participate in company dispute settlement schemes and give up their legal right to petition the court system for relief?  Further, what happens when those contract clauses conflict with state consumer protection laws?

Following in the footsteps of the credit card industry, AT&T inserted a clause mandating customers stay away from class action lawsuits.  By telling consumers they are forbidden to participate in such cases, AT&T pushes customers into the murky world of “arbitration” — a system where AT&T picks a private company, with whom it has a financial-business relationship, to “impartially” rule on customer complaints in secret proceedings.  Consumers have to pay their own way to attend arbitration hearings, often held in cities a thousand miles away or more.  They also must agree the decisions are binding and final.

AT&T argues, both directly and through its dollar-a-holler advocates, that class action cases are annoying, expensive, and do not typically deliver substantial benefits to class members.  The wireless carrier argues arbitration of individual cases is much faster and potentially more lucrative to would-be class action members.  Stephen J. Ware, a professor of law at the University of Kansas School of Law argues consumers have often done far better avoiding litigation and entering into arbitration programs.

But consumer advocates claim AT&T’s arbitration rules are stacked against consumers.  Arthur H. Byrant, executive director of Public Justice argues:

First, AT&T’s “agreement” bars its customers from court (except small claims court) and requires them to utilize the company’s mandatory arbitration program. Its rules say that, if a customer completes the process and recovers more than the last written settlement offer AT&T made before the arbitrator was chosen, a $7,500 premium will be paid. Second, the “agreement” bans AT&T’s customers from bringing or participating in class actions against it. Third, the “agreement” provides that, if AT&T’s class action ban is found to violate the law (as 20 states have held contractual class action bans do when they effectively immunize a company from liability), the arbitration clause “blows up” and the class action must proceed in court. Then, when the class action ban is struck down under state law (as AT&T knew it would be), the company springs its wacky trap: It argues that the Federal Arbitration Act of 1925 (FAA) pre-empts — and invalidates — that state law because (believe it or not) the state law is biased against arbitration.

AT&T’s call for pre-emption suffers from a bad connection. State law is not biased against arbitration. It allows AT&T to resolve disputes in either arbitration or court. Only AT&T’s “agreement” is biased against arbitration. Its “blowup clause” precludes class actions from proceeding in arbitration, but not in court.

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Using the scroll bar to the right of the player, move down and click on Attorney Paul Bland’s name and watch him argue forcefully that AT&T’s motives are plain and simple — to allow them to get away with anything they want and not face accountability from the legal system. — “Arbitration is not the Candy Bridge into Rainbow Land.”

Tapping Into Consumer Discontent With Class Action Cases for the Benefit of AT&T

What the lawyers get

Ask anyone about the merits of most class action settlements and one will often get a response that the lawyers win while consumers lose.  Just this week many owners of HP printers will get word a deal has been reached over a class action case involving printer ink.  The multiple law firms involved will split not more than $2.9 million under the terms of the proposed settlement.  Consumers will get “e-credit” worth $5, $2, or $6 redeemable at HP’s online store, which sells ink cartridges at inflated prices.  In effect, HP has little to grumble about delivering “awards” to consumers that ultimately benefit its own enterprise, the only place those awards can be redeemed.

With settlements like that all too common, it is easy for AT&T’s advocates to tap into consumer discontent with class action lawyers, proclaiming AT&T’s case is actually consumer-friendly because it would cut those money-grabbers out of disputes with the company.

But consumer advocates stress class action cases do more than deliver settlements — they deter bad behavior on the part of would-be wrongdoers, bring corporations to account fiscally when they are forced to settle, and open the door to legal discovery which can uncover patterns of extensive wrongdoing that would otherwise remain secret in arbitration.

But most important of all, class actions impact every customer, not just the handful who navigate arbitration to achieve a confidential settlement.  That can be critically important to stop unfair business practices.

What you get

Of course, reform is also desperately needed in the class action system.  Too often, judges approve class action cases that deliver maximum benefits to the law firms that bring them, leaving consumers with peanuts.  Strict limits on legal fees recouped in such cases, perhaps tied to a percentage of total recovery would be a start, as are bans on settlements that don’t provide cash refunds to consumers who choose not to conduct further business with companies that abuse them.  Coupons, low value trinkets, and donations to third party groups (non-profit or otherwise) are insufficient.  Attorneys that selfishly claim most of the proceeds for themselves have only themselves to blame when corporations use that fact against them under so-called “tort reform” proposals.

Some advocates of AT&T’s position also argue that government oversight can provide a more effective system of checks and balances against corporate overreach.  While a noble sentiment, anyone who has watched the revolving door of lobbyists going to work for such agencies, later returning to lucrative jobs with the companies they formerly regulated, knows that is a classic case of the fox overseeing the hen house.  In an era of government “oversight” that missed everything from BP’s safety lapses, salmonella-infected eggs, produce, and meat, tainted pet food ingredients from China, and indecisiveness about telecommunications reform like Net Neutrality — such proposals are not to be treated seriously.

The Supreme Court Decision

While it will be months before the Court rules, most observers suspect consumers will ultimately win the case.  Liberals on the court are skeptical AT&T’s efforts to preempt state consumer protection laws are actually for the benefit of consumers, and some of the most conservative members of the court like Justice Clarence Thomas, big believers in “states’ rights” are likely to find for the Concepcion family.

“Based on what was said during the argument, I predict a 8-1 or 7-2 vote for the consumers and California, with Samuel Alito dissenting and John Roberts a toss up. Thomas, who never speaks at oral argument, will vote for the consumers and state on federalism grounds, as he always does in [arbitration] cases,” writes Lawrence Cunningham, Argument in Class Waiver Case Favors Consumers, States, Concurring Opinions.

“[I]t doesn’t look as though there are too many votes at the high court to do away with the right of consumers to band together to sue the great American manufacturers of fine print,” said Dahlia Lithwick, Can You Hear Them Now? The Supreme Court reads the fine print on your cell phone contract, Slate.

If these two observers are wrong, it will be open season on consumers who will be forced into arbitration agreements that deliver all of the benefits to companies like AT&T.  Under such a scenario, there would be little to dissuade companies from developing new fine print to trick and overcharge consumers.  Few will be willing to buy a ticket to fly halfway across the country to sit for arbitration proceedings over a $20 dispute, especially when the arbitration firm’s income depends on fees paid by the very companies that are accused of wrongdoing.