Set-Top Cable Boxes to Increase in Price, Comcast, Verizon Say

The Associated Press reports that cable companies will begin to charge more for their set-top boxes in response to expensive changes to the boxes ordered by the Federal Communications Commission.

The FCC has been trying to get consumers to purchase their own set-top boxes, as opposed to just renting them from their cable companies, as most do. If people buy their own boxes, they are required to buy a cable

The cable companies also state that the price increase on the boxes, which must all receive digital signals and change channels, comes from the FCC attempting to create competition for the boxes.

Cable companies were required to begin shipping the updated boxes by July 1. They have, however, been resistant against this change simply because the new boxes are more expensive. It is also a problem for the cable companies because many consumers claim it is just a way for the companies to raise rates.

Although the companies cannot say exactly how much rates will increase, they have said that an increase is inevitable. Even people who own the older set-top boxes are likely to be hit by the rate hikes.

Comcast Corp., who is the largest cable operator in the nation clocking in at 24 million video subscribers, plans to spread the rate increase among the people who rent cable boxes.

According to the Associated Press report, Comcast is calling the new FCC rule a tax on consumers.

Alex Dudley, spokesman for the 12-million subscriber Time Warner Cable Inc., agrees with Comcast, saying that the FCC is simply employing a tax.

Along with the biggest cable operators is The American Cable Association, who represents around 1,100 of the smaller, more local cable companies. They say they have no choice but to pass a portion of the cost onto consumers. In the Associated Press Report, Ross Lieberman, vice president of the group, said that the increases rates are likely to occur in January after an announcement in December of the year before.

Verizon Communications has been given a pass on the cable card mandate by the FCC. Other video suppiers were given passes as well, with Verizon saying that they provided much needed competition against the cable companies.

The Associated Press reports that Rob Stoddard, spokesman for the National Cable and Telecommunications in Washington, said, "the commission's 11th-hour action on the many long-standing waiver requests doesn't bode well for consumers, There's nothing in these decisions to stave off a $600 million set-top box tax likely to affect the great majority of cable customers while providing no benefit to consumers."

Sources:
http://news.yahoo.com/s/ap/20070704/ap_on_hi_te/cable_boxes_rates;_ylt=Al6mm1AwKP3YMbbT1bYyMhGyBhIF