April 23, 2009, 3:24 PM — Complaining about slow service and an unreasonable early termination fee, a small group of people are trying to bring a class-action lawsuit against Clearwire.
In a complaint filed in the Superior Court for the State of Washington in King County on Wednesday, five people from Washington, Hawaii, Minnesota and North Carolina say that their service was much slower than DSL or cable modem, despite Clearwire's advertisements.
But the suit mainly centers on fees that the plaintiffs have been required to pay once they decide to cancel their subscriptions. In one case, Donald Schultz of North Carolina claims he often called Clearwire about his slow connection but the speed never improved. About a year after he signed up for the service he moved to a location outside of Clearwire's coverage area. He was still required to pay a US$150 cancellation fee, according to the suit. Others tried to cancel because the service was too slow but were required to pay the fee.
Clearwire's terms of service, as stated on the company's Web site, say that if a subscriber cancels service for any reason, including moving out of the service area, the early termination fee applies. The fee could be $220 or less, depending on the length of the contract the customer agreed to and the remaining length of the contract.
Mobile-phone providers faced a number of lawsuits over recent years regarding their early termination fees and the operators often lost the suits. They now prorate the fees, so that customers pay less as the term of the contract progresses. It appears that Clearwire made a similar change because its fee is prorated for customers who signed up following March 1, 2007. However, the mobile operators also now typically don't require customers to pay if they are moving out of the coverage area.
The lawsuit cites a Web site that collects user complaints about poor service.
In addition to the early termination fee issue, the suit also charges Clearwire with false advertising for marketing the service as comparable to DSL and for marketing its phone service as reliable.
The people who are part of the initial suit live in cities that are using older technology than is available today. Clearwire is in the process of upgrading its network to technology that might prove faster and more reliable. So far Baltimore and Portland, Oregon, have the new technology and Clearwire expects to upgrade eight other cities this year.
The suit asks the court to require Clearwire to change its advertising and void the early termination. The suit also seeks damages.
Clearwire did not respond to a request for comment about the suit.
