Lawsuit by Clearwire Subscribers Alleges Misleading Advertising and Unlawful Early...

Wed Apr 22, 2009 6:04pm EDT

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Lawsuit by Clearwire Subscribers Alleges Misleading Advertising and Unlawful
Early Termination Fees

WASHINGTON, April 22 /PRNewswire/ -- A lawsuit was filed today against
Clearwire US, LLC ("Clearwire") seeking certification of a class action on
behalf of Clearwire subscribers.  As alleged in the lawsuit, Clearwire entices
consumers into long-term contracts for internet and phone service by
advertising its service as a fast, reliable "always-on" alternative to cable
or DSL internet access, and as a superior alternative to traditional land-line
telephone service.  But, according to the complaint, when those consumers seek
to cancel their Clearwire service because they discover that, in fact,
Clearwire service is slow and unreliable (or for any other reason), the
consumers learn that their long-term contracts contain an Early Termination
Fee provision pursuant to which Clearwire charges a fee of up to $220 for
canceling.

The lawsuit alleges that Clearwire's advertising is deceptive and that its
Early Termination Fees are unlawful.

Clearwire is a Washington-based company with its headquarters in Kirkland,
Washington.  Clearwire has claimed in its filings with the Securities and
Exchange Commission that it has hundreds of thousands of U.S. subscribers to
its internet service, which it offers in sixteen states.

The complaint alleges that Clearwire engages in unfair business practices in
the imposition and collection of Early Termination Fees.  The complaint
alleges that the majority of Clearwire's subscribers are required to enter
into one or two-year agreements.  Should a subscriber decide to cancel
Clearwire service for any reason, including lack of internet service or moving
to a location in which Clearwire service is not offered, Clearwire charges the
subscriber an Early Termination Fee.  The complaint alleges that the Early
Termination Fee constitutes an unlawful penalty, stymies competition, and is
otherwise void and unenforceable.

The complaint also alleges that Clearwire engages in false advertising of its
internet and telephone services.  Although Clearwire advertises its internet
service offering as a reliable, comparable, and "always-on" alternative to
cable internet or DSL, the complaint alleges that Clearwire's internet service
is actually far inferior to cable internet and DSL, as consumers frequently
experienced service disruptions, including dial-up speeds and lack of service
entirely.  With respect to Clearwire's telephone service, although Clearwire
advertises its telephone service as a superior alternative to traditional
land-line telephone service, the complaint alleges that Clearwire's telephone
service is far inferior to traditional land-line service, as subscribers
experience frequent service disruptions.

The plaintiffs who have brought the lawsuit are from various states in which
Clearwire offers service, including Washington, Hawaii, Minnesota, and North
Carolina.  They seek recovery of any Early Termination Fees paid by Clearwire
subscribers, as well as an injunction prohibiting Clearwire from enforcing the
Early Termination Fees and from further false advertising.

The lawsuit is captioned Minnick et al. v. Clearwire US, LLC, and was filed in
King County, Washington.  Plaintiffs are represented by the Washington, D.C.
law firm of Tycko & Zavareei LLP and the Seattle, Washington law firm of
Peterson Young Putra.  A copy of the complaint can be downloaded from the
Tycko & Zavareei LLP website, www.tzlegal.com.

SOURCE  Tycko & Zavareei LLP

Jonathan K. Tycko of Tycko & Zavareei LLP, +1-202-973-0900
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