http://arstechnica.com/telecom/news/2009/03/comcast-goes-after-illegal-resale-of-its-internet-service.ars
Ocean City, Maryland is a resort town, drawing vacationers to its beaches from nearby states. As such, many of the multiunit condos are used for summer rentals, with short-term occupancy the rule. In the era of the laptop and netbook, providing free Internet access is a selling point, and OceanNet offered building owners the opportunity to have someone else install and manage a WiFi network for the guests. Unfortunately, it appears that OceanNet kept its service cheap by getting unauthorized access to Comcast's residential service, and the cable giant is not amused—it's suing to recover the ill-gotten gains of the WiFi provider.
We'll leave aside the whole issue of why someone would accept technical services from a company with a website that looks like a fourth grader's school project, and calls one page descriptions of its installs "whitepapers." OceanNet claims to require access to a phone closet for installation of its equipment; from there, it can run its wiring and place its equipment in the ceiling or in other closets in order to provide complete coverage.
Unfortunately, based on a copy of the lawsuit that Comcast provided us, it also appears that the cable giant needed access to one of the closets that OceanNet had installed its equipment in. While there, the technician apparently found that the WiFi network was drawing its Internet access from a residential-class cable modem illicitly spliced into the building's feed. Comcast alleges that check of the cable modem revealed that it was registered to a specific user, one Frank Clark, at a different address.
There were two unusual aspects to this: Frank Clark happened to be the sole operator of OceanNet, and he had apparently registered for Comcast service at a total of 35 addresses. The company alleges that all of these represent locations where he was reselling Comcast's Internet service through WiFi installations.
Now, Comcast would clearly be within its rights to terminate Clark's accounts, as its terms of service are pretty clear about not letting anyone resell access from a residential account. The Prohibited Uses and Activities section states that no one is allowed to "resell the Service or otherwise make available to anyone outside the Premises the ability to use the Service (for example, through wi-fi or other methods of networking), in whole or in part, directly or indirectly. The Service is for personal and non-commercial residential use only and you agree not to use the Service for operation as an Internet service provider or for any business enterprise or purpose (whether or not for profit)."
Nevertheless, Comcast isn't simply looking to cut Clark off. The lawsuit cites two sections of federal law in its allegations against Clark and OceanNet; these deal with licenses for cable operators and "fraud and related activity in connection with computers." The company appears to want to get the money it has been losing back, as it asks the court to award it some combination of legal fees, lost income, statutory damages, and enhanced damages. It also wants all of OceanNet's business records so it can identify any other place that might be offering WiFi access to its cable service.
A Comcast spokesperson wouldn't speculate why simply cutting of Clark's service was considered insufficient, but indicated that the company wouldn't have filed the suit if it didn't feel it had a compelling case.
Despite what appears to be a compelling case against him, it appears that Clark will not go quietly. A local newspaper is reporting (via Broadband Reports) that he plans to fight the suit. Clark apparently feels that reselling residential service is common, and he's simply being singled out because he was successful.
