Cox ordered to pay $6.31M for tying set-top fees to premium video services

A federal court in Oklahoma has ordered Cox Communications to pay $6.31 million to settle a class-action lawsuit filed by customers who complained that the MSO forced them to lease set-top boxes in order to receive premium services.

With more customers able to join the class-action complaint, the award could be tripled to around $19 million, including attorney's fees.

"Cox is disappointed in the verdict, but gratified that the jury recognized most of the damages plaintiffs were seeking were unwarranted," said Cox spokesman Todd Smith, in a prepared statement provided to FierceCable. "We've filed a motion to overturn the verdict and believe we have solid grounds."

The eight-day trial was followed by three days of deliberation. Much of the testimony centered on whether Cox customers were actually coerced into leasing set-tops, given that they had alternative pay-TV programming choices though satellite operators DirecTV and Dish Network. 

Aside from devices offered by TiVo, there are not many retail set-top alternatives beyond boxes from cable providers. 

"Where the tied product generally was not available for sale from another firm through no fault of the defendant, there cannot be any coercion as a matter of law," Cox said in legal papers obtained by the Hollywood Reporter.

For their part, the plaintiffs effectively argued that Cox contributed to limit the amount of choice at retail for cable-ready set-tops. This argument ties to CableCard, the FCC-mandated security technology that was supposed to enable retail devices to work in the pay-TV ecosystem. Beyond TiVo, consumer electronics companies largely abandoned CableCard and accused cable operators of not giving it proper technology support.

The FCC, through its new Downloadable Security Technology Advisory Committee (DSTAC), is proposing new replacement technologies for CableCard.

"From this evidence, a jury could reasonably infer that Cox contributed to the lack of a viable market for third-party set-top boxes and that several well-financed consumer electronics companies were poised to enter this market," the plaintiffs said in their court papers, also obtained by THR. "Thus, the alleged lack of competitors does not excuse Cox's coercion."

For more:
- read this Hollywood Reporter story

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