Virginia ISP Locks Customers Into 25-75 Year Contracts; Sues Everybody When Monopoly Threatened
from the 3/4-of-a-century-with-the-same-crappy-service dept
There aren't many consumers out there who are pleased with long-term contracts, whether it's their cellphone provider or their ISP. For most, a one or two-year exclusive contract makes it economically unfeasible to switch carriers at the drop of the hat. These contracts tend to result in lower quality service, as exclusive, lengthy deals rarely stoke the fires of innovation or improvement.
Now, take that 1-to-2-year deal and its attendant downside and extrapolate it to the length of a murder sentence. That's the reality being faced by residents of Loudon County, Virginia.
With help from a local developer, OpenBand apparently convinced a lot of communities to sign exclusive franchise agreements that ran for between 25 to 75 years. While users in these developments could sign up for other TV or broadband services, they still had to pay the $150 monthly association fee to OpenBand.If you can lock customers into a contract that runs their entire lifetime, you're hardly going to be providing top notch service. Why? Because the pressure provided by competition is no longer an issue. OpenBand did what most companies would do in this situation -- nothing.
Complaints grew and grew over the years, with customers saying it reached the point where they stopped contacting the ISP, given their exclusive arrangement resulted in them being totally unwilling to improve service. It got so bad, some locals wound up getting a second broadband provider -- and just paid two bills for service with nothing they could do.These complaints finally reached the FCC, which decided to implement some rules changes to make these long-term contracts illegal. The housing developments locked into these deals also pushed back, declining to renew their contracts with OpenBand.
This made OpenBand unhappy and it decided to respond the way most companies do when their monopolies are threatened -- by filing lawsuits.
Last fall they decided to sue everyone, including the county Board of Supervisors, two supervisors individually, and several homeowners associations.Despite the fact that the FCC itself has declared these long-term contracts to be anti-competitive and "forbidden" (by a 2007 FCC order banning "exclusivity clauses"), OpenBand is still trying to get its monopoly reinstated. Its arguments represent the "best" qualities of pedantic legal wrangling, boiling down to some very specific wording.
First, OpenBand claims that the FCC has no jurisdiction over its "arrangements" with Loudon County homeowners:
Saunders also argued that neither Lansdowne or Southern Walk could receive the relief they seek from the courts because the FCC order only addresses video service and not Internet or telephone, both of which the communities get from OpenBand...OpenBand is attacking very specific wording here, attempting to justify its monopoly over the two other services (phone and internet) it provides. The second aspect of its argument relies on specific terminology as well -- contracts vs. easements. One of the judges hearing the appeal has already sniffed this weasel-wording out.
"The FCC ruling, it seems so clearly directed at prohibiting exactly what is taking place here," Judge J. Harvie Wilkinson III said as OpenBand began its arguments in the Lansdowne case. "And I am beginning to get the idea that these standing questions, these ripeness questions, a lot of them are just a fog that's being thrown up [by OpenBand attorneys] to provide protection for a shell game that's going on here with all these different companies and different agreements."OpenBand's arguments are already being challenged in the appeals court, which is rehearing the lawsuits brought against it by two Virginia homeowners' associations. The lawsuits OpenBand filed against two Loudon supervisors and two homeowner's associations are currently on hold, as all county judges have recused themselves from the case because of their familiarity with one of the defendants, an attorney who is also a former board member of one the HOAs.
Wilkinson repeated the sentiment when the discussion of the telecommunications easements owned solely by OpenBand were raised. He said it was all a part of an "evasive web" and that OpenBand appeared to be seeking "to evade the FCC exclusivity order by calling the contractual agreements…easements. It is one thing after another. The whole thing is a subterfuge."
Whatever the result of these lawsuits, OpenBand's reputation is already mostly destroyed. It was already a cursed name in Virginia six years ago and looks as if it's done nothing over the last half-decade to improve its service or its relationship with its "customers." (It's really tough to characterize people stuck in a 25-75 year contract as "customers," hence the quotation marks. Customers usually have a bit of freedom when purchasing goods and services. The members of these HOAs clearly don't.)
The fact that OpenBand is willing to spend millions ($4 million so far) to reclaim its monopoly clearly indicates that infrastructure and customer service are the last things on its mind. These short-sighted and recriminatory lawsuits will only make it that much tougher for it to land contracts (or "easements") with anyone in the future. Even if it wins, it loses.
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Filed Under: broadband, isps, monopolies
Companies: openband
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Even if it wins, it loses.
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Let us hope they lose and go out of business. Hopefully it'll send some clear signs to the other mammoths in this market. How is Google broadband doing? Are they going to expand?
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The principles behind this need to be known so that even if they form a new business, potential customers can understand who they are dealing with.
"Oh, aren't you that other company that locked people into lifetime contracts and then provided crappy service and ignored complaints?"
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And easements? they tried to state it was an easement (of any of the types)? Bwahahahaha
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don't you know that in bizarro world, everything illegal has been legalized (for the 1%), and everything necessary has been made illegal (for the 99%)...
...and *THAT'S* the way we like it ! ! !
(it must be, i mean, its 'our' gummint, aint' it ? ? ?)
damn commie...
quit yer bitchin' and get back to the gulag...
art guerrilla
aka ann archy
eof
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Essentially I told them if they wanted to sue a dead lady with no monetary estate, have at it. And then I'd make sure every newspaper and TV channel in Canada carried the story.
Never heard from them again.
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The county officials probably received kickbacks.
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Now that being said, I'm pretty sure that this is a Sherman Antitrust Act Violation...or something close to it.
All I know is that the county and city officials are not responsible for the contracts that a cable or broadband company acts upon its customers.
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*perhaps* (PERHAPS) *technically* true; BUT (and, yes, that is quite a big butt you have there!), it is generally the county/municipal/HOA leaders who make contracts with these scum-sucking bastards to give them EXCLUSIVE rights to use the rights-of-way/easements for running their cables/fiber...
in other words, THERE CAN BE NO COMPETITION/alternatives due to these exclusive deals...
i am actually emailing with a local muni ISP to BEG them to extend out into the county, telling them that we will GLADLY donate an easement on our own properties to run the inertnet tubes, and take our damn tractors out and dig the damn trenches and lay the damn fiber OUR OWN SELVES...
however, i'm guessing this will come to naught, because the county HAS locked out ANY competition... fuckers...
(i have tried to get alternatives -from various satellite providers, to the local cable monopoly- but NONE of them will provide us service -EVEN IF THEY ARE TECHNICALLY CAPABLE OF DOING SO- because they have 'NON-COMPETE' agreements with each other...
i thought that was called 'collusion', but what do i know...)
art guerrilla
aka ann archy
eof
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They might go for this. I was once setting up a home office in the middle of nowhere way back when multiple phone lines were essential. I needed 5. The phone company informed me "tough luck" as all of the available lines wer eused and they wouldn't add more until a minimum amount of backorders had piled up.
I offered to dig the trench and lay the lines myself if they'd inspect and hook them up when I was done. They accepted my offer, and I got my phone lines.
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Who in their right mind would sign a 25 to 75 year Phone & Internet contract, especially with so many other competitors with only 1 or 2 year contracts available? Even if they're slower today.
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lessons unlearned
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I like to catch my own through the ice though.
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Just remember to raise your hat to him, or else you might find it nailed to your head...
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I remember a similar case where it was ruled that a condo/townhome ass or apt complex could not sign exclusive contracts in this same industry.
Another reason to avoid hoas like the plague.
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But yes under the current social culture, keep away of HOAs like the plague.
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(seriously, it is EASY to see how our gummint is morally bankrupt when you see 'regular' people turn into raving lunatics over nothingburgers...)
what has happened with ours, is that a minority of entitled jerkoffs made serving on the board, etc SO MISERABLE, they have effectively run off anyone else from participating who didn't want to be tyrannical assholes like themselves, and so the minority of tyrannical assholes have effective run of the place...
'they' have spent THOUSANDS AND THOUSANDS of dollars on lawyers fees and liens to fuck over this one guy who refuses to pay his dues... now, the guy is in the 'wrong' (although i definitely sympathize with him), BUT spending almost ten thousand to collect about a $200 fee, is insane...
does not matter that EVERYONE else does not want to do this, they run the place and insist they 'must' do it...
(they are 'legally' wrong, but when you ask a lawyer if you need more lawyering, guess what they say ? ? ?)
yes, AVOID an HOA at all costs, if you can...
brings out the worst in people...
art guerrilla
aka ann archy
eof
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If you think it's bad now...wait until the US Gvt. becomes the biggest health insurance broker in the nation. Obamacare is not universal healthcare...it's a tax law that pays into your insurance provided by the federal government. It's universal health insurance.
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My god, the whining on the left bank of the Atlantic is epic! It nearly ranks up there with "OMG my gas costs only 1/3 what it costs in the rest of the West, instead of 1/7..." - and no, I am *not* exaggerating those proportions.
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Well, that's what you get for having reliable public transportation over there.
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The problem with Obamacare is that all it relates to is insurance brokerage...where the Federal Government is your insurance agent. The whole thing costs us 30% of our income in a separate tax on top of our federal income taxes.
There is no need for a massive supply and demand system in a health insurance situation unless you account for your specific individual rates going up or down depending on your health...Obamacare bases your rates in a tax basis of the national average health care cost...which is never universal and never should be.
Then there's the excuse that it pays for everything when it actually pays more than twice than what is necessary to pay for. Under Obamacare, a procedure that would normally cost $18,000 co-pay for normal insurance outside of Obamacare would cost the Federal Gvt. 60,000 for the same co-pay under Obamacare. Why? Because at some point the tax code actually makes the IRS pay back a certain percentage of the cost you put into them paying for you (sort if like social security taxes on steroids). So really, left or right wing...anyone capable of algebraic mathematics can test and retest all that.
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What I find rather amusing is that the GOP dubbed Obamacare has its roots in republican proposals made in the 90s. Once again, they rail against that which they conceived.
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Good luck trying to afford a dose of chemo therapy, medication that is roughly $20-$600 per pill for a 30 day supply, paying $350 an hour for a half hour visit to a doctor's office, and paying $30,000 in case you have to get your tonsils or appendix removed....without copay...which more than halves all that cost...
My medication is $92 per pill for a $30 day supply and all I pay is $6.56 in copayment. Why? Because I have health insurance. Obamacare doesn't cost the consumer, it costs the economy.
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State level can step in if the federal government goes a little to far in it's reactions.
You see this a bit with states legalizing pot, despite the DEA's wishes.
I'm not for anyone taking drugs and ruining the lives of others (self destruct if you want, but think of your family before you do) but it's pretty clear from the over full prisons and no slow down in the flood of illegal drugs that the current method isn't working; maybe we should try a different plan. For science.
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If you're forced to work for something you want no part of you're a slave. You might be a slave for 2 hours a month or more depending on your wages.
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Are they being sued for breach of contract as well?
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I wonder if these developers realize these deals significantly decrease the appeal of their homes on the market.
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I'm sure they are fine. 75 years, just walk it off.
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75 year contract
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Um... where are you quoting from?
I'd like to read the original story. (Plus, it's only polite to give credit to whomever wrote it.)
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Re: Um... where are you quoting from?
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Openband=MC Dean
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