A federal jury in Oklahoma has awarded $6.31 million to a group of cable TV customers after it found that Cox Communications broke federal antitrust law.
Cox unfairly forced customers to rent its set-top box as a condition of receiving premium cable service, the jury ruled. Refusing the box meant being unable to access Cox's interactive channel guide and on-demand video, according to the original complaint.
Not only did tying premium service to set-top boxes limit features for subscribers who wanted to use third-party boxes, but Cox unfairly profited from customers who rented its own set-top box (and may have been forced into the decision against their will), according to the class action. A congressional probe this year found that consumers pay more than $230 a year renting set-top boxes from their cable companies.
"Even if Cox purchases set-top boxes for only $200, Cox's monthly rental fee of at least $6.99 in its Oklahoma City market will surpass $200 in less than two years and five months," the complaint read, "leaving Cox with a minimum of 2½ years of pure profits and consumers with a substantial loss."
Cox argued that it didn't force customers into doing anything they didn't want to do, noting that Dish and DirecTV are both available in the region. It also pointed to other set-top boxes such as TiVo that could provide an alternative to the Cox equipment.
But the jury ultimately decided in the subscribers' favor. Despite the ruling, Cox officials are "gratified that the jury recognized most of the damages plaintiffs were seeking were unwarranted." The company is trying to get the verdict overturned.
Federal regulators are looking at whether to adopt new rules on cable companies that aim to weaken their control over the set-top box market. Companies like Google have argued for the ability to repackage the way cable channels are displayed to consumers on third-party boxes, while cable firms cite legal and contractual hurdles to opening up their service for others. Meanwhile, some firms, such as Time Warner Cable, hope to retain consumers by doing away with the set-top box entirely.