New cable boxes will bring surcharge

Most Spokane Comcast cable television subscribers can expect a monthly surcharge in their bills by next year due to changes in the type of converter boxes users can lease.

That fee increase for Spokane subscribers won’t be known until later this year, said Comcast spokeswoman Sena Fitzmaurice. She said Spokane Comcast video subscribers won’t likely see the hike until early 2008.

Comcast and other cable companies are now required to offer video customers only set-top or cable converter boxes that use separate security cards. The Federal Communications Commission ordered that change to take effect July 1.

Set-top boxes are the units that allow customers to get cable signals. The vast majority of Spokane’s roughly 100,000 Comcast video customers use set-top boxes, either in a basic model or in advanced versions. They pay a monthly fee ranging from a few dollars to more than $10 per month.

Comcast’s more advanced boxes include DVRs (digital video recorders) or boxes that decode high-definition video.

The cable industry says the new card-ready set-top boxes will cost more to make and that it must pass the added cost onto subscribers.

How much Spokane subscribers will pay extra depends on how many of the new boxes are deployed, said Comcast spokesperson Sena Fitzmaurice.

The FCC allows cable companies to use a cost-averaging formula to decide how much it can charge for leasing such boxes. The formula looks at the total number of new boxes leased in a market, said Fitzmaurice, and allows the cable company to spread that increased cost to all of its cable-TV customers, she said.

The more card-ready boxes Spokane subscribers switch to this year, the higher net impact that will have on monthly lease costs Comcast will charge, said Fitzmaurice.

If few people adopt the new card-ready boxes, the lower the net impact will be, said Fitzmaurice.

When that equipment investment is calculated later this year, the cost will be shared by all of Spokane’s set-top box customers, whether they switch to the new units or not, said Fitzmaurice.

One way consumer groups say subscribers can avoid the monthly lease costs for set-top boxes is to buy their own cable-ready equipment. But that option requires buying a card-ready TV set or buying a high-end HD-TV or TiVo-style DVR that can work as a set-top box. In general, most cable customers prefer the less-expensive monthly lease cost — averaging about $10 per month — to buying a DVR for $300 to $400.

Up to this point, Comcast and other cable companies have built channel-security features into the boxes consumers use. The FCC’s goal, in adopting the new rule, is to encourage manufacturers to make more products that would work with removable security cards. That option theoretically will free consumers from being dependent on cable-company hardware, the FCC said.

But Comcast, the nation’s largest cable company, considers the FCC set-top box an unneeded expense and of little value for consumers.

“The security mandate amounts to an FCC tax of hundreds of millions of dollars on consumers with no additional benefits,” said Fitzmaurice, who works in Washington, D.C.

Cable customers who have no desire for the new boxes have no reason to switch, said Fitzmaurice.

Over time, however, brand new subscribers signing up for cable video in Spokane will only be able to lease card-ready converter boxes, DVRs and high-definition boxes.