Cable firms to raise box price

PHILADELPHIA – Cable companies are planning to charge more for set-top boxes to help pay for new, more expensive versions mandated by the Federal Communications Commission.

They say the price increases are a result of the government’s push to spur competition for the boxes, which are required to receive digital programming and change channels. It’s not yet clear how much the charges will rise.

The FCC has been trying for nearly a decade to open up the set-top market so subscribers actually buy their own and then use a cable-company-provided card to decode their programming. The retail market for the boxes, however, has largely failed to materialize and millions of consumers still rent the boxes from their cable company.

As of 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.

And higher rates are definitely coming. Cable industry officials said even consumers using the older set-tops will likely be hit if the cable company decides to spread the cost to all box renters.

Cable operators won’t yet say exactly how much more consumers will pay to rent set-top boxes. It’s also unclear whether the fee increases will apply to cable cards.

Both 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.

Philadelphia-based Comcast Corp., the nation’s largest cable operator with 24 million video subscribers, is planning 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.