Charter says proposed FCC set-top rules would force it to charge modem fees


Charter Communications says a provision buried deep within the FCC’s proposed set-top regulation would, if adopted, require it to charge a modem fee. 

“We’re the only major broadband provider that doesn’t charge this fee, because we view modems as part of providing a superior broadband service, and it makes us a stronger competitor by allowing us to offer better deals to our subscribers,” Charter said in a blog post today. 

“Deep within” the FCC’s “Unlock the Box” proposal, the company added, “is a provision that has the potential to affect millions of consumers, requiring all internet providers to charge a modem rental fee and include it as a distinct line item in their customers’ bills, even if that company (like Charter) doesn’t currently charge a modem fee.”

The blog post followed an ex parte filing rendered earlier by Charter, in which it said the FCC proposal is in direct conflict with Time Warner Cable and Bright House Networks merger conditions that require it to supply free modems. 

Is the provision even in the newly updated FCC proposal, which will be voted on by agency commissioners later this month?

"The FCC sought comment in the NPRM whether MVPDs must charge a  separate non zero fee for navigation devices. We understand this is in the final proposed rules," responded Charter spokesman Justin Venech

Also unclear: Why can’t Charter just list “0” as the monthly cost of its modems, if they are in fact, free? 

"The wording would require a non-zero fee for navigation devices," Venech added. "So, even if Charter doesn’t currently charge a modem fee and does not want to charge a modem fee, the FCC would require us to do so."

The FCC released the following statement: “As part of the proposal, all pay-TV providers are required to be fully transparent about the cost consumers pay for leased equipment used to access video programming. The goal is to uncover hidden fees and give consumers the ability to make informed choices. If a consumer chooses to purchase their own equipment at retail, our rules would require they no long have to pay for the built-in cost on their bill. We look forward to input from the Commissioners on this aspect of the proposal.”

In its blog post, Charter added, “The FCC is right to be concerned about some companies sneaking in certain charges into their customers’ bills. If transparency is the ultimate goal of the FCC’s provision, we would be more than happy to specifically note on our customers’ bills that our modems are free.”

Meanwhile, as FCC Chairman Tom Wheeler tries to push through his revised proposal to open the pay-TV set-top business to third-party device makers, Sen. John Cornyn (R-Texas) asked him to delay the agency’s vote on the proposal until Senate Judiciary Committee can look at it.

For more
- read this Charter blog post
- read this Morning Consult story

Related articles:
Charter: Set-top proposal at odds TWC acquisition conditions
Rosenworcel wary of angering content community with set-top vote, analyst says
Wheeler puts pay-TV back on defense with revised set-top proposal