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4/23/2009
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Clearwire Subject Of Class Action Complaint

Frustrated customers say service hasn't been as fast or reliable as advertised, and when they seek to cancel their service they're pressured to pay early-termination fees.

U.S. telecom, Clearwire has been served with a class action lawsuit alleging misleading advertising and "unlawful" early termination fees by some customers using its service.

The 77-page complaint, filed in King County, Washington State, was prepared by Washington D.C. law firm Tycko & Zavareii and Peterson Young Putra, of Washington State. The complaint generally argues that Clearwire service hasn't been as fast or reliable as advertised and when consumers seek to cancel their service they are pressured to pay early termination fees.

In an e-mail, a spokesman quoted Clearwire as saying: "As a matter of company policy, Clearwire does not comment on pending legal matters." He added that the complaint appears to refer to pre-WiMax service.

Last year, leading wireless service providers including AT&T, Sprint and Verizon Wireless all eased their early termination fee policies under pressure from the FCC and consumers. At the time, then-FCC chairman Kevin Martin said he favored termination fees that would more accurately track the actual cost of phones received by consumers -- for instance, a $100 phone would have a lower termination fee than a $250 fee.

The Clearwire complaint includes plaintiffs from Washington State, Hawaii, Minnesota and North Carolina. "We believe these complaints are very widespread," said Jonathan Tycko, one of the plaintiff's attorneys.

The complaint does not address the actual WiMax technology. WiMax is still an emerging technology, particularly its mobile features. Currently Baltimore and Portland are the only two U.S. urban areas with mobile WiMax. Clearwire is rolling out the high-speed mobile WiMax service rapidly and plans to introduce commercial service in several U.S. cities by the end of the year.


InformationWeek has published an in-depth report on private cloud computing. Download the report here (registration required).

This article was edited on 4/24 to clarify the suit does not include WiMax services.

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