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The Real Deal: TWC Adds New Modem Fee

Updated: Thursday, April 10 2014, 01:52 PM EDT

ALBANY -- If you're a Time Warner Cable customer, you will be now charged $3.95 per month to rent your modem.  If you haven't already received a postcard in the mail alerting you to the new charge, it should arrive in the next few days.

All Internet and/or digital phone customers with Time Warner service will see the charge for the first time on the November bill.  Most customers CBS6 spoke with on Wednesday, are not at all happy about it.  "It's not like it's a new system coming in, I guess you can have it replaced if you call them but otherwise it just doesn't seem right...when you pick a service and you pick it for a certain price you don't expect to be charged more," says Valerie Glover, a TWC customer from Niskayuna.  Paul Ferro, another local customer echoed the feeling saying, "I think that's outrageous, I think we pay enough for cable why should we have to pay for a modem?"

A spokeswoman for Time Warner Cable, Jennifer Reed Holick, tells CBS6, the extra $48 per customer, per year will, "allow us to service or replace the equipment, provide better user experience and further enhance our Internet services."  Time Warner has charged lease fees for set-top boxes for many years and the company claims it is now joining other providers who've already been charging monthly fees for cable modems. 

There are a small number of customers who have opted into a "price lock guarantee,a those customers will not see this fee applied while they are active in that agreement. 

Customers who do not want to lease, may purchase their own modem but it must be on the list of approved models that will support Time Warner's technology.  Most of those modems are made by Motorola with a starting retail price of around $80.  You can find a list of those models:  Digital phone customers will require an additional piece of hardware from Time Warner in order to make a personal modem compatible with their phone service.  The company claims it will offer that technology free of charge to anyone who requests it. 

Earlier this week, two class action lawsuits were filed in New York and New Jersey against Time Warner Cable for this fee.  Lawyers representing TWC customers claim the fee is illegal because it's not included in current customer agreements and the company didn't give ample notice.  

Steven Wittels is one of the attorneys handling the case.  "They (customers) had an expectation under the customer agreements that they would not pay for these modems, we want the company to abide by that.  If they want to change and have a new policy for new customers that's a different story but current customers shouldn't have to pay," he tells CBS6.  Wittels believes that Time Warner Cable writes-off the cost of customer modems, "the company doesn't expect to get any money back on it, they've written it off yet here they are just looking for another revenue source.  On an individual basis, sure $4 is not going to kill the average consumer but it adds up for the company to $500 million a year, that's our estimate," he says. 

The Real Deal: TWC Adds New Modem Fee

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