Cox Class Action: Customers Unfairly Forced to Rent Set-Top Boxes

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Cox Communications was hit with a class action lawsuit alleging the company gouges customers by forcing them to rent expensive cable boxes to access premium channels they already paid for.

Lead plaintiff April Bagwell alleges in her class action lawsuit filed in Nebraska, that the cable company unfairly requires customers who subscribe to premium channels to pay rental fees for set-top boxes to access those channels, even though these customers already pay more.

The plaintiff also claims that the rental fees far exceed the cost Cox pays for the set-top boxes.

According to the complaint, the rental fee “quickly adds up to more than the cost Cox paid to purchase set-top boxes in the first place, leaving Cox with months of pure profit once the purchase price of the set-top box is fully paid off and consumers with a substantial loss.”

The class action complaint further alleges that Cox’s rental fees “have substantial adverse effects upon interstate commerce and has caused and continues to cause direct economic injury to members of the class.”

Cable companies often encrypt premium content; scrambling the program data so regular non-premium customers do not have access to the premium channels, notes the plaintiff in her complaint.

Cox does this with the set-top box that acts as a security device, unscrambling the premium channels.

According to the class action lawsuit, premium subscribers must rent the set-top box to unscramble the content from Cox.

This is not fair to consumers, argues the plaintiff, because premium customers pay extra for access to the additional channels and must rent the set-top boxes directly from Cox to access the programing they already paid for.

“There is no valid reason technologically or otherwise to bundle the device that performs this security function with the digital conversion and two-way communication functions of set-top boxes or to stifle innovation into new technologies by a competitive market,” argues the plaintiff in her complaint.

The plaintiff further alleges in her class action lawsuit that Cox is violating a mandate from the Federal Communications Commission that prohibits the bundling of services using set-top boxes.

The plaintiff argues that Cox is taking advantage of security concerns to illegally bundle set-top boxes with other services; and action that chills competition in the set-top box market.

Cox’s cable box practices have been the target of a number of class action lawsuits. The cable company faced a consolidated class action lawsuit in Oklahoma; however, in 2011 the proposed nationwide Class was rejected by the court.

Bagwell is represented by Steven M. Delaney of Reagan Melton & Delaney LLP, Todd M. Schneider and Jason Kim of Schneider Wallace Cottrell Konecky Wotkyns LLP, Allan Kanner and Cynthia St. Amant of Kanner & Whiteley LLC, and Joe R. Whatley Jr. of WhatleyKallas LLC.

The Cox Communications Set-Top Box Class Action Lawsuit is Bagwell v. Cox Communications Inc., Case No. 8:16-cv-00406, in the U.S. District Court for the District of Nebraska.