Charter Communications (NASDAQ: CHTR) is coming under fire for what critics say is a unique policy of including modem leasing fees in the overall price of high-speed Internet service.
Among a number of companies opposing Charter's attempt to buy Time Warner Cable (NYSE: TWC) and Bright House Networks, Boston modem vendor Zoom Telephonics Inc. has attempted to sound an alarm with the FCC in recent public comments -- TWC and Bright House customers who lease their own modems, Zoom said, will be in for a shock when Charter takes over their cable system. Charter, Zoom said, will likely make these customers lease new CPE.
"There is no assurance that Charter will allow existing TWC and BHN customers to attach Zoom modems in the future or even to continue using Zoom modems they already possess," Zoom said to the FCC.
Zoom's plea drew the attention of the Los Angeles Times, which reported that Southern California's 1.8 million TWC subscribers could be impacted by the Charter policy.
"The Communications Act says that cable companies should sell cable modem leases and Internet service separately," Andrew Jay Schwartzman, a professor at Georgetown University Law Center who is representing Zoom, told the Times. "By combining the prices, Charter's customers are deprived of the ability to purchase advanced cable modems and save the cost of monthly rental fees," he said
Speaking to FierceCable, however, Charter spokesman Justin Venech denied that the operator's modem fee is wrapped up in the overall price of Internet service. "Unlike other ISPs that charge $8-10 for modems, Charter provides its customers modems for free," he said. "Charter does not charge a modem lease fee and our customers appreciate this. In addition, if a current TWC or BHN customer likes the specific package that they are in, they can continue with the same package."
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