The complaint by three subscribers in Southern California accuses Time Warner of fraud, among other illegal acts, because it continues to charge customers for channels it's not transmitting and has not provided rebates for the programming they've missed.
It's possible that Time Warner could have avoided this fight had it been more proactive about rebates. The longer the impasse dragged on, though, the greater the chance that consumers (or rather, the plaintiff's bar) would vent their anger and frustration in court. And the cable company is the logical target, not CBS, considering that the broadcaster's signal is still available, for free, over the air.
Public sentiment also seems to be running against Time Warner. Witness all the references to the cable company blacking out CBS, as if the network would be happy to let Time Warner continue retransmitting its signal without a contract. That's partly a result of CBS' public relations efforts, including its crafty offer to let Time Warner continue carrying Showtime, a channel whose fees apparently aren't in dispute.
(Yes, I know, CBS is blocking Time Warner's broadband customers from watching full episodes of its shows at CBS.com. That's ... aggressive. What's worse, the blockade also extends to broadband customers who don't take cable, who live in cities not covered by the dispute with CBS or who subscribe to a non-Time Warner Internet service provider that leases space on Time Warner's system. But it's hard to sue someone for denying you free content that it's still making available for free in another format.)
It's an open question whether the lawsuit will linger on after the blackout ends, assuming it does in relatively short order. And if the plaintiffs do continue to pursue damages, Time Warner may argue that its terms of service require the dispute to go to arbitration -- where class actions are not an option.
The bottom line, though, is that the lawsuit only adds to the pressure on Time Warner to cave in to CBS' demand for higher retransmission fees, which the cable company will then dutifully pass on to its customers.
I get it: Many Time Warner subscribers are angry about being cut off from some of their favorite programs. The anger is likely to grow when the NFL's regular season begins Sept. 8 and Time Warner customers have to trudge to a sports bar to watch the games instead of tuning in from the comfort of their homes. But Time Warner is ostensibly fighting for lower programming costs and the right to transmit CBS' shows digitally, two things that would benefit customers. So if I were one of those customers, I wouldn't be trying to make Time Warner buckle. Not yet, at least.
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