Senators take Comcast, other MSOs to task for modem leasing

With the FCC moving on the issue of pay-TV set-top leasing, six U.S. Senators have turned their attention to another consumer CPE expense, cable modems.

Senators Ron Wyden (D-Ore.), Bernie Sanders (D-Vt.), Jeff Merkley (D-Ore.), Al Franken (D-Minn.), Ed Markey (D-Mass.), and Elizabeth Warren (D-Mass.) have written FCC Chairman Tom Wheeler, asking him to do something to stop what they call "unfair billing practices" by companies including Comcast.

In fact, the lawmakers seemed to single out Comcast (NASDAQ: CMCSA). The Senators estimate that the company made $275 million to $300 million per quarter from modem leasing fees alone.

"We are troubled upon hearing complaints of consumers being charged the modem rental fee after they have returned the rented equipment to Comcast or being charged the rental fee having never rented a modem in the first place," the Senators wrote. "Not only are the majority of customers using automatic payment systems and may not personally authorize every erroneous charge, many consumers report having to call and remedy this problem throughout several billing cycles. In fact, customer help boards found online at Comcast's help and support forum contain complaints about this exact problem."

For its part, Comcast issued the following statement: "Comcast operates in a highly competitive environment across all of our lines of business. Acknowledging some of our issues with customer service, we have undertaken a substantial, multi-year effort to reinvent the customer experience, including improving billing systems, reliability, and all of our interactions with our customers. We are investing hundreds of millions of dollars in this effort and are working hard to improve and we won't stop until we have made the changes necessary. We take every FCC complaint seriously, and respond to each one on an individualized basis. We are also using the information from complaints in our ongoing efforts to improve the overall customer experience."

Last year, this same group of lawmakers asked Wheeler to look into a pay-TV set-top leasing business they said costs consumers $231 a year. Last week, Wheeler proposed new rules that would supposedly "unlock" the proprietary pay-TV set-top market to include devices from third-party manufacturers sold at retail.

For more:
- read this Ars Technica story
- read this Bloomberg story

Related articles:
Google, the most profligate lobbyist of all, drinks the cable biz's milkshake with FCC set-top proposal
Wheeler: Set-top proposal is not AllVid
Public Knowledge: Pay-TV customers overpaying on set-tops by $6 billion to $14 billion

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