Wednesday, April 1, 2009

Comcast seeks to crush innovation, technology, customers, American Way

From the Maryland Daily Record comes word of an oppressive new lawsuit by cable giant Comcast against an innovative small businessman named Frank Clark, and his innovative firm, OceanNet. According to Comcast's complaint, Clark innovatively subscribed to Comcast's cable modem service at 35 condo complexes, and then innovatively re-sold the signal via WiFi to residential customers in those buildings. Innovation wins! Everybody wins!

So what does Comcast do to address Clark's disruptive new innovation, premised on nothing more than innovatively space-shifting legally-purchased service? They sue their customer, of course! Relying on industry-written statutes like the Cable Communications Act and even the federal criminal code, as well as antedeluvian, pre-Twitter doctrines like "breach of contract," "unjust enrichment," "constructive trust," and "negligence," Comcast -- backed by two law firms -- is seeking damages, an injunction, a declaration, and even attorneys' fees and "investigative expenses." Especially offensive is Comcast's breach of contract claim, which seems to be based on the noxious notion that a company can impose limits on their law-abiding customers' space-shifting rights. What's next, a different contract where customers pay even more for the ability to exercise their God-given right to space-shift their service? This "tak[ing] away your fair use rights and sell[ing] them back to you" cannot stand. That defenders of the technology status quo like Ira Rothken would take to the pages of the Maryland Daily Record to defend Comcast's suit only demonstrates the sorry state of the legal profession.

It's time Comcast celebrate innovation rather than mount a litigation crusade to crush every new piece of technology and business model that comes along. Suing customers like Mr. Clark will get them nowhere.
Comcast v. Clark and OceanNet complaint


  1. A couple of other interesting observations

    --the defendant is now obligated to use the technology in the cable modem "responsibly" otherwise, he breaches a duty owed to the cable co. by causing them harm. Query whether it would have mattered if the defendant bought his own modem.

    --The complaint is not clear about "authorization". It's a somewhat open question under the CFAA (1030) for example, as to what that term means. It could mean (1) once you're into a system lawfully, you can do what you want; or (2) breach a contract and you've committed a felony.

  2. Nice try on the April Foolishness. As if there's a state called "Merryland"!

  3. I haven't heard of other bloggers jumping in to defend this guy's actions, so I'm not really sure where the sarcasm is coming from, Ben (unless you really buy into the kind of over the top attempts to equate advocacy of copyright reform and inventive responses to pervasive infringement with advocacy of theft, to which you linked yesterday). If the allegations in the complaint are true, this guy would clearly seem to be breaching his contract(s) with Comcast. They'd be entitled to an injunction, and probably some damages too. The parallel between this case and copyright cases would seem to be, not that Techdirt or EFF are leaping to the defense, but rather, that the plaintiff is seeking to use statutory damages provisions available under federal law to avoid having to prove damages (or to augment provable damages). While it sounds like Comcast has a great contractual/state law case, they may have trouble with their federal claims. No court that I'm aware of has found 553 to apply to internet service (as opposed to TV service), and there's authority suggesting the contrary. But I'm sure Comcast would like the 60K per violation if they can get it.

  4. It is hard to tell what your real take is on this. Certainly Comcast can terminate this users accounts for violating the TOS, but sue for damages? If he was really causing "damages" they would have been "damaged" by the high band width usage of his connections and would have discovered the "damage" by network metrics--but they didn't. Instead, they stumbled across some of his network equipment.

    Much of the coverage of this case has falsely claimed that the defendant illegally taped into Comcast's network. That is false. The defendant bought and paid for multiple Comcast accounts. None of those accounts were closed for excess bandwidth usage. The only core dispute is whether the defendant bought the kind or package Comments says he should of. That isn't illegal. Breach of contract, maybe, but not illegal. And it certainly wasn't "tapping."

    I think the defendant was trying to pull a fast one. But I think Comcast is, too, by suing for damages rather than just canceling his accounts. The defendant efficiently served a transient market that Comcast did not. Now Comcast is trying to get its revenge.


  5. I have fought this issue myself. Here are Comcast term and coditions related to this subject.
    • The Service cannot be resold or otherwise made available to anyone on the Premises or outside the Premises (i.e. wi-fi, "hotspots", or other methods of networking), directly or indirectly, unless done with Comcast’s written approval in accordance with an applicable Service plan.

    The rule clearly states the Frank is in the wrong, but there is an out. That out is with Comcast’s written approval. I have for over two years tried to gain Comcast written approval and there is no one and I mean no one at Comcast who know how to get this approval. If they are going to prosecute Frank using this condition should they not allow you to write for approval?

  6. OK, it's a year later, and the verdict (literally) is in.

    Comcast lost. On the criminal charges, at least. No damages, no lost compensation, no recompense for legal fees. All Comcast has left is the civil case on TOS; which means that, depending on laws in the jurisdiction where the civil suit was filed, Comcast may not even be able to recover court costs.


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