OnStar Update: The Court Cases Begin

Telecom Policy Report, May 14, 2007

An unhappy Cadillac owner whose in-car OnStar service will go dead next year as a result of digital upgrades to General Motors Corp.'s "peace-of-mind" roadside-assistance feature, has filed a class-action lawsuit against the automaker but not against the agency that forced GM into that decision.

As we reported in a previous issue of Telecom Policy Report (March 4), next year, wireless carriers won't have to support OnStar's analog transmissions due to a 2002 FCC decision, and OnStar won't be able to support those older- model vehicles already on the road that haven't upgraded to digital. While newer GM vehicles are come equipped with digital receivers, many older models can't be upgraded, meaning they will lose OnStar when the analog support ends starting next year.

Virginia resident Robert Weaver bought his OnStar-equipped Caddie the year the FCC made its decision, and he's one of some 1.5 million owners whose Verizon-carried analog service will end next year. In his suit, filed in the U.S. District Court for the Eastern District of Michigan on behalf of Weaver and any affected OnStar customers, Weaver says GM knew it was switching to an all- digital OnStar network but it continued to sell analog-only systems, failing to inform customers they were to be phased out. He wants GM to reimburse all affected customers the $199 cost of their OnStar systems along with their subscription fees. The suit also seeks to block GM from shutting off service or from charging customers the $15 cost of an upgrade, if their cars are, indeed, upgradeable.

According to GM, nearly 90 percent of OnStar subscribers have vehicles that either have the digital system or can be upgraded. For those who don't, GM will provide a year of free OnStar service on any new vehicle leased or purchased by the end of the year.

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