Charter Communications Inc. will offer consumers throughout the country free premium services, high-speed Internet connections or service upgrades to settle a class-action lawsuit over wire- maintenance fees and charges for unneeded converters.
In notifying consumers of the settlement, Charter stressed that it is not admitting fault with the settlement agreement.
Charter is ending the suit to avoid the “significant cost in time and money” needed to litigate, the MSO said.
The settlement amount might reach as much as $200 million, based on the type of compensation selected by customers across the country.
BEGAN IN SOUTHEAST
Two consumers sued Charter in South Carolina in 2001, but that lawsuit was joined to another challenge filed in Georgia and ultimately certified as class-action litigation.
The suit claimed Charter charged consumers for a wire-maintenance plan but did not give sufficient notice that the plan was optional.
The suit also claimed that the cable company charged some basic and expanded basic customers for converters they did not need. Attorneys for the plaintiffs did not return calls for comment on the tentative settlement.
Charter, in an agreement tentatively approved by the court in South Carolina, agreed to give consumers a choice among services, including a free premium service for six months; a free cable modem and service for six months; or six free pay-per-view or video-on-demand selections.
The latter two options include the use of a converter for three months.
Basic customers also may opt to upgrade to expanded-basic service for three months.
Consumers who have dropped Charter’s service also might qualify for settlements, including high-speed Internet or digital-cable hook-ups for six months. Those consumers are being notified in national print ads.
THIRD SUMMER SETTLEMENT
This is the third notable legal settlement by Charter this summer. Earlier this month, the cable company reached a proposed shareholders’ settlement to end litigation over alleged violations of securities laws, which could carry a $144 million price tag.
Shareholders claimed Charter executives made materially false and misleading statements about revenue and earnings between 1999 and 2000. That settlement includes cash and stock buybacks.
Charter and other California operators also are trying to settle a late fee-related class-action suit challenging the practice of collecting a 5% franchise fee on top of the penalty amount. Plaintiffs have claimed that the practice puts the late-fee amount above a statuatory cap.
A final settlement in process there would cost Charter about $187,000.
Consumers in the wire-maintenance and set-top class-action suit will be notified about the settlement in bill statements through September. Final action on the settlement is expected in November.