No Class Action in Modem Case

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A federal judge in Los Angeles has denied class-action status to two
cable-modem subscribers who had filed an antitrust suit alleging illegal tying
of Internet access and content by some of the country's largest cable
operators.

The decision, which can be appealed, was crucial because it immediately
eliminated the risk of the cable operators having to pay billions of dollars in
damages, said Washington, D.C.-based lawyer Burt Braverman, who is defending
Adelphia Communications Corp. in the case.

'If it's sustained [on appeal], I think it's the death knell for the
litigation,' Braverman added.

A Time Warner Cable modem subscriber in Tampa, Fla., and a Comcast Corp.
modem subscriber in Baltimore brought the case in 1999.

The suit alleged that the cable operators and Excite@Home Corp. violated
antitrust laws by requiring cable-modem subscribers to purchase both Internet
access and content services, then overcharging for the combined product.

The two subscribers, saying they represented 4 million cable-modem
subscribers nationally, asked for injunctive relief for all current and future
cable-modem subscribers and damages for all subscribers from Nov. 15, 1995,
until the date damages were awarded.

On Jan. 26, U.S. District Judge Ronald S.W. Lew tossed out the class-action
request, saying the plaintiffs failed to meet the legal standard for attaining
class status, particularly with respect to future cable-modem subscribers.

'By its very nature, a class definition that includes members not presently
aggrieved is imprecise,' Lew said in a 21-page opinion.

Braverman said the plaintiffs have until Feb. 12 to appeal Lew's decision to
the U.S. Court of Appeals for the Ninth Circuit. He added that Lew must grant
the plaintiffs permission to appeal.

Without class status, the plaintiff would be reduced to seeking damages just
for themselves -- probably no more than a few thousand dollars. Braverman said
he doubted that the case will go forward if the courts remove the possibility of
a huge award of damages.

In November 1999, GTE Corp. filed a similar suit in federal court in
Pittsburgh against Comcast, AT&T Corp. and Excite@Home, but the case was
dropped last August without explanation.

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