ABC 12 – WJRT – Flint, MISet-top boxes will cost more

Set-top boxes will cost more

PHILADELPHIA (WJRT) (WJRT) -- (07/05/07)-- Cable companies say they'll charge more for their set-top boxes. The extra money, they say, will be used to pay for new, higher-priced boxes that are mandated by the Federal Communications Commission.

Blame it on the government, they say. Cable companies say the government's push to spur competition for the boxes is causing the increases.

Those boxes are necessary to receive digital programming and to change channels.

How much the cost will rise has yet to be determined.

Beginning July 1, cable companies were required by the FCC to start shipping the new set-top boxes with detachable cable cards.

The companies have lobbied against the rule, saying the new boxes are more expensive. Consumer groups say it's yet another excuse for cable companies to raise rates.

Make no mistake-the rates will increase. Those in the cable industry say charges for all boxes, including the older, unimproved boxes, will pay more.

Cable trade groups have said consumers would see $2 to $3 more in monthly rental rates for the new boxes, but that doesn't take into account spreading the cost out to all box-renters.

Comcast, the nation's largest cable operator with 24 million video subscribers, plans to spread out the cost of the new boxes among all cable box renters.

The FCC cable card requirement "amounts to an FCC tax of hundreds of millions of dollars on consumers," Comcast said in a statement.

Time Warner Cable Inc. spokesman Alex Dudley said the company agrees with the cable industry's stance that the FCC cable card rule is a "tax" on consumers. New York-based Time Warner is the second-largest cable company with 13 million video subscribers.

The cable industry is upset that the FCC on Friday denied its petition for a blanket exemption to the cable card mandate and yet granted a temporary one to Verizon Communications Inc. New York-based Verizon is rolling out its fiber optic television, phone and Internet service.

The FCC said Verizon provides needed competition against cable. The agency also gave waivers to several other video providers, including those that roll out all-digital systems by Feb. 17, 2009.

Chris Murray, senior counsel at Consumers Union in Washington, said it's convenient for cable companies to blame regulators when they've stalled about complying with the FCC rule for years. Cable operators also have had no problem raising rates regularly for various reasons.

"They raise rates three times faster than inflation every year, for more than a decade," he said. "Cable companies want to have absolute control. We don't think they should have it."

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