Cox Communications Unlawfully Jacked Up Price of Fixed-Rate Cable TV Contracts, Class Action Alleges

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A proposed class action alleges Cox Communications has unlawfully jacked up the monthly price of its fixed-rate contracts for television service bundles by “steadily increas[ing]” the amounts of two “hidden” surcharges.

The 44-page lawsuit concerns 24-month fixed-rate contracts for certain cable TV plans offered by defendants Cox Communications, Inc. and CoxCom, LLC that bundle television with other services such as internet, phone or home security.

Per the case, customers signed up for these contracts—and thereby gave up their ability to terminate or downgrade their service without paying a “significant” early termination fee—under the impression that Cox was similarly locked into charging no more than the agreed-upon monthly rate for the full 24 months, the suit alleges.

The complaint claims that Cox’s representations regarding the fixed rate were false in that the company never informed customers of its intention to inflate their monthly service rates mid-contract by quietly increasing a “broadcast surcharge” and “regional sports surcharge.”

“Cox failed to adequately disclose these service charges during the signup process, and Cox never disclosed the fact that Cox could, and would, use these service charges as a covert way to increase the monthly service rate mid-contract despite Cox’s promises to the contrary,” the suit states.

According to the case, the amounts Cox has charged for the broadcast and regional sports surcharges have steadily increased since 2015, regardless of whether customers were locked into a fixed-rate contract. Most recently, Cox increased the broadcast surcharge by $3.00 in March 2022, for a monthly total of $19.00, and the regional sports surcharge has increased to $12.00 per month, the lawsuit relays.

The plaintiffs estimate that Cox has “extracted” more than $70 million since 2015 from over a million California and Nevada customers through mid-contract increases to the two surcharges.

The case relays that the broadcast surcharge is a monthly service fee that Cox began adding to customers’ bills in 2015 at a rate of $3.00 per month. The regional sports surcharge, the suit says, is a separate fee that Cox began charging in 2017 at a rate of $3.00 per month. Both surcharges appear under the “Monthly Services” section of customers’ bills under “Additional TV,” according to the complaint.

The lawsuit argues that the two surcharges are fees for services covered by customers’ service agreements. This is significant, according to the suit, because Cox represented to customers that the rates they would be charged for “services” would not increase throughout the 24-month term of their contracts.

Contrary to Cox’s representations, however, the company, “as a matter of policy,” used the broadcast and regional sports surcharges “as levers to covertly ratchet up the service price in the middle of the supposedly fixed-rate contract,” the case alleges. The suit says the two surcharges have increased at least once a year since 2015, each time by $1.00 to $3.50 per surcharge. Because the price increases were so small, and the surcharges were buried in customers’ bills, Cox knew subscribers were unlikely to notice them, the lawsuit argues. 

The case claims Cox essentially admitted that the broadcast and regional sports surcharges were an unlawful increase to customers’ monthly service rates when the company updated its new service plan offerings in March 2021 to remove the two surcharges. At the same time, Cox increased the prices of its service plans by up to $28.00—an amount “equivalent to the lost Surcharges revenue,” the lawsuit alleges.

The lawsuit looks to represent all consumers who entered into a term contract for Cox cable TV service in California or Nevada where Cox increased the amount of the “Broadcast Surcharge” or “Regional Sports Surcharge” in the middle of the contract.

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