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CableLabs Sues Buckeye Over Delinquent Dues

Jeff Baumgartner
12/12/2018
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CableLabs is taking Buckeye Broadband to court over allegations that the Ohio-based operator is delinquent in paying dues to the cable industry-backed, Louisville, Colo.-based R&D organization.

In a suit filed December 5 with the US District Court for the District of Colorado, CableLabs is suing Ohio-based operator Buckeye Broadband over claims that the MSO has breached its agreement.

In the lawsuit, first spotted by CableFAX, CableLabs said Buckeye notified the organization on Jan. 15, 2018 of its intention to terminate its membership in CableLabs, and has since stopped paying fees to CableLabs that are typically due on a quarterly basis.

CableLabs claims, however, that Buckeye's subscription agreement with CableLabs requires at least three years notice before termination becomes active, so Buckeye, therefore, will remain a paying member of CableLabs through Jan. 14, 2021.

Per a copy of the lawsuit filing obtained by Light Reading, Buckeye Broadband entered into a subscription agreement with CableLabs on or about June 3, 1992. In it, a clause notes that a subscription agreement shall not be terminated by Buckeye fewer than three years written notice to CableLabs. In mid-April 1997, as part of a dues rebate consideration, Buckeye confirmed in writing that the subscription agreement (and that three-year written termination notice rule) remained in full force.

The specific sum CableLabs is pursuing in the suit was not mentioned, but does note that Buckeye's alleged delinquent membership dues exceeds the sum or value of $75,000 exclusive of interests and costs.

Per CableLabs bylaws, amended in March 2017, the initial level of dues is equal to 2 cents per subscriber per member per month, though such dues can be altered for "different classes" of MSO members.

In March 2016, the CableLabs board revised a formula for the calculation of quarterly membership dues for 2018 -- 0.05157% of the cable revenue (commercial and residential) of the member and the member’s affiliates for the previous quarter.

CableLabs, which heads up key specifications such as DOCSIS 3.1 and Full Duplex DOCSIS, is not commenting further. Buckeye Broadband has been asked for comment on the suit and why it moved to terminate its agreement with CableLabs.

Buckeye Broadband, which has begun some D3.1 work with Harmonic Inc. (Nasdaq: HLIT), isn't a huge cable operator (it has about 170,000 residential and business customers in parts of Northwest Ohio and Southeast Michigan), but membership fees are an important source for CableLabs. CableLabs, which has members around the globe, also gets revenues from events and from Kyrio , a subsidiary formerly known as NetworkFX that was spun out in 2012. Today, Kyrio serves as an "extended commercialization engine" outside the cable industry and sells testing, security, and online, geo-location services. (See OCF Picks CableLabs Subsidiary Kyrio for IoT Device Testing and CableLabs Spins Off Device-Security Unit.)

The lawsuit represents another fracturing in the usually collegiate but consolidating and shifting cable industry. In October, Altice USA dropped out of industry trade group NCTA – The Internet & Television Association . "As our business interests continue to evolve, we will focus on direct advocacy relating to issues that impact our businesses and our customers, working with industry peers and other associations when our interests are aligned," Altice USA said then.

CableFAX said Altice USA has "given notice to preserve its option to pull out of CableLabs," but remains an active member and is still paying dues.

Cablevision Systems Corp. (now part of Altice USA) briefly yanked its CableLabs membership in 2002, but returned as a dues-paying member the following year. Back in 2002, Charter Communications Inc. invoked a clause that could've paved the way for the MSO to withdraw its membership within three years, but did not follow through on it.

— Jeff Baumgartner, Senior Editor, Light Reading

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Jeff Baumgartner
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Jeff Baumgartner,
User Rank: Light Sabre
12/13/2018 | 9:16:34 AM
Offensive move and defensive deterrent?
I still haven't heard from Buckeye on their reason for putting in notice, though I imagine it's all about cost-cutting and a questioning of what influence they have w/CableLabs initiatives and a belief that they will still be able to take advantage of CableLabs initiatives and efforts whether they or not they are a card-carrying member. 

 

CableLabs hasn't commented beyond what's expressed in the suit, but it's clear that it's offensive as they move to protect against this alleged breach of the agreement. I imagine it might also serve as a deterrent -- intended or otherwise --  to others that might be considering something similar. JB 
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