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Comcast Sneaks in Another Billing Line Item and "Earns" an Additional $1 Billion

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My Comcast bill arrived today with a sneaky new $2.68 charge, $2.50 for leasing one (and only one) set-top box and $0.18 for the remote. This new billing line item, like the many others Comcast has introduced, adds to its bottom line with no additional capital expenditure. It shows how resisting the obligation to return to accepting set-top box free, "cable ready" sets was a smart strategy. Now Comcast can charge for a device rental that it used to provide free of charge (for the first one) because consumers cannot access its service without one.

Remarkably, the FCC never got around to replacing its CableCard "solution" with a viable, consumer-friendly update. For their part, cable operators never followed through on a "commitment" to offering "true two-way" consumer access using increasingly versatile and intelligent television sets to handle rather simple upstream commands to the cable operators' Headends.

Of course, Comcast subscribers now can use their own set-top boxes, such as a Roku, but the company has a perfect, profit-maximizing strategy for that as well: charge $9.50 a month and rebate $2.50 for "subscriber supplied equipment." Brilliant and incredibly greedy at the same time.

I am well overdue for a return to Over the Air Reception ("OTAR") of broadcast television even in my quite rural locale, centrally located in the middle of nowhere: State College, PA. Comcast all but wants me to do this, so it can concentrate on its transition to being a vertically integrated broadband venture combining its owned content and conduit. Besides, broadband has far greater profit margins, none of which have to be shared with content providers through retransmission consent. Actually, revenues flow the other way as when Netflix agreed to compensate Comcast for content carriage.

Subscribers of Comcast should revolt, but I suspect few will even notice the increase. What's a few dollars more, especially after Comcast's now $8.00 "Broadcast TV Fee," some of which flows to the company's NBC stations? Comcast also has a "technology fee" that most high definition television subscribers have to pay. I guess the company can justify this recurring line item as helping it recoup the costs for upgrading networks to handle high definition signals.

You really should examine the line items in cable television bills. Few companies can quantify and foist onto customers their estimate of having to comply with government regulations and pay local governments franchise fees. But my bills has line items entitled Franchise Fee and FCC Regulatory Fee. I call these costs overhead, but Comcast frames them as "fees" that they can pass through to customers.

Finally, I have reached the tipping point where gouging nudges — makes that pushes — me to old school technology. I expect Neighborhood Homeowners Association opposition to my outdoor antenna. Maybe I can assert a First Amendment right.

Written by Rob Frieden, Pioneers Chair and Professor of Telecommunications and Law

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More under: Law, Policy & Regulation, Telecom


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