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Charter: Line Item Modem Charge Would Be New Consumer Fee - Broadcasting & Cable

Charter: Line Item Modem Charge Would Be New Consumer Fee

Says requirement is at odds with TWC deal
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Charter has been telling the FCC it should not require MVPDs to break out the prices of set-tops, modems and routers as part of the set-top box revamp proposal.

Charter has argued that it does not charge for modems and does not roll them into the price of the service, pointing out that its price is competitive with other MVPD's before their separate modem rental fees are added in.

"Deep within this proposal 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 company blogged.

The FCC is probably looking for Charter to lower the price of service when it lists a separate modem fee, but since Charter says it is not charging customers for the modem, the takeaway could be higher prices for Charter customers. A spokesperson had no comment on what Charter would do if the FCC goes ahead with the navigation line item requirement on customer bills. But the company blogged: "It doesn’t stand to reason that customers will benefit from forcing companies to start charging for modems they currently give away for free."

In a meeting with a top aide to FCC Commissioner Ajit Pai, Charter exec Alex Hoehn Saric pointed out that in the Charter/Time Warner Cable deal, the FCC expressly prohibited Charter from offering a separate modem fee for discounted broadband service it will offer low-income residents, so requiring a fee is at odds with that and demonstrates that the requirement would be arbitrary and capricious.

"While we agree companies should be open and honest about what customers are paying for each month, and are willing to look for ways to be more transparent about our modems being free, we cannot support a proposal that would force us to create a new modem fee on every customer bill," Charter blogged.

"If you believe Charter's modems are 'free,' you probably still believe in the tooth fairy, too," said attorney Andrew Schwartzman, who represented Zoom Telephonics in a challenge to Charter's modem's over another issue. "If Charter has to charge a fair price for its modems, it can and will reduce the price for Internet service," he said. "The diference is that Charter's customers will then know how much they can save by purchasing their own modems at retail."

FCC Chairman Tom Wheeler has said he remains open to tweaking the item, but has also said he plans to vote it Sept. 29.

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