Time Warner Uses Court Data to Nab Pirates

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If operators have any doubt about the social acceptability
of cable theft, they need go no further than Bergen County, N.J.

Time Warner Cable's system there recently sent letters to
known owners of doctored set-tops, offering them the chance to surrender their boxes, pay
up and avoid prosecution.

The effort earned coverage in the local paper, The
Record
, but the bulk of the article focused on whether the cable operator violated
privacy laws to pursue local cable pirates.

"The attitude remains that 'It's just cable,'"
said Lorraine Riorden-Mooney, director of public affairs in Time Warner's Palisades Park,
N.J., office. "We wouldn't be having this conversation [about privacy] if we were
talking about drugs."

Time Warner in Bergen and Hudson counties, as well as other
Time Warner systems throughout the country, received information obtained during a civil
suit in Miami. The operator pursued the suit against Worldwide Electronics of Coconut
Creek, Fla., which allegedly sold doctored boxes advertised in magazines and on the
Internet.

During the court case, Time Warner gained access to
shipping lists and other customer information seized by the U.S. Marshals Service.

The Bergen County operation used the information to contact
300 local customers of Worldwide. The letter, drafted by MSO attorneys, informed customers
of the law on set-top ownership and advised them to surrender and pay $1,000 in
restitution or be pursued legally.

To date, according to Riorden-Mooney, 200 consumers
surrendered their hardware and signed agreements that they would not buy another doctored
box. Most negotiated settlements of under $1,000, she added.

The respondents have not railed about privacy invasion, she
said, instead settling up promptly.

Most of them were shocked that Time Warner knew they had
doctored set-tops. They apparently never considered the fact that they were leaving paper
trails by making out-of-state purchases by credit card or check that required shipping to
their home addresses.

The 100 letters outstanding may be to former addresses or
to folks who are adamant about resisting, Riorden-Mooney said.

Although The Record's article questioned the privacy
issues of Time Warner's campaign, virtually all sources in the article affirmed the
opinion that Time Warner used the information legally.

Further, the article attracted all of the
local-broadcast-network affiliates to the story. The publicity even caused a few people
who had bought set-tops from other vendors to call and inquire about their legal jeopardy,
Riorden-Mooney said.

In the past, operators have been loath to pursue pirates
beyond vendors for fear of alienating potential local customers. Cable piracy continues to
hover at an average of about 10 percent per system.

Also, as cable companies spend more on system upgrades, the
loss to piracy increases proportionally, cable-piracy experts said.

They noted a recent study by the Cable and
Telecommunications Association for Marketing, which indicated that a large majority of
consumers still have a benign view of piracy.

"I think the persistent public indifference will spur
operators to deter theft," cable-piracy attorney Geoff Beauchamp said.

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