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‘Tis The Season for Comcast Rate Hikes: Cable Modem Rental Increases to $5 Per Month

Phillip Dampier September 16, 2009 Comcast/Xfinity, Internet Overcharging 4 Comments
Cable Modem

Motorola SB6120 SURFboard DOCSIS 3.0 eXtreme Broadband Cable Modem

Another year, another rate hike for millions of Comcast customers.  The cable company is notifying cable subscribers of rate increases for programming and equipment.  While Comcast says the rate increases are among the lowest the company has implemented, the sting will be felt differently based on the types of services a customer receives.  One particularly nasty increase is for the cable modem rental fee.  In most areas, that used to be $3 a month, but is now increasing a whopping 66% to $5 a month.  Comcast blames the increased equipment expenses incurred upgrading their broadband network.

Consumers can avoid the monthly rental fee by purchasing their own cable modem, retailing for $60-100 depending on the model.  A Motorola SB6120 SURFboard DOCSIS 3.0 eXtreme Broadband Cable Modem is available from Amazon.com for less than $90 and works with Comcast.

Although not every Comcast customer rents a cable modem from the company, the company will earn hundreds of millions of dollars in new revenue from the rate increase for cable modems, according to Multichannel News.

The Marin Independent Journal crunched the numbers:

In the San Francisco area, where Comcast has 2.2 million customers, the average rate increase will be 1.6 percent, down from a 4.9 percent spike in 2008-09 and a 6.9 percent jump in 2005-06.This year’s rate increase is the lowest in the past six years in what has become an annual rate hike for Comcast customers. The company has raised rates on its average Marin customer by a cumulative 29.5 percent over the past six years, based on the company’s annual notices of price changes.

The San Jose Mercury News observes that the rate increases will hit some harder than others:

Ironically, the customers who will see their rates increase are those who subscribe to the company’s lowest-end — and least-enhanced — packages. Subscribers to Comcast’s more expensive packages generally will see no rate increase.

Mindy Spat, communications director of The Utility Reform Network, a San Francisco-based consumer advocacy organization, said Comcast appears to be taking advantage of its lower-end customers.

She noted that many Bay Area consumers who were unable to tune in the new digital broadcast signals signed up for limited basic cable to continue to get the local channels after the old analog ones were switched off earlier this year. With the increases, Comcast also appears to be trying to push customers into higher-tier packages, she charged.

“If consumers had choices, they certainly would not choose Comcast,” Spat said. “But they don’t, and Comcast is taking advantage of the fact.”

Of course, the only thing not increasing this year is Comcast’s 250GB usage cap.  It remains locked firmly in place at 2008 levels.  How much Comcast will recoup from a perpetual modem rental fee providing up to $300+ million a year in new revenue is an open question.  But clearly some cable operators intend to pay for upgrades to their networks by means other than forcing consumers into consumption billing schemes.

Currently there are 4 comments on this Article:

  1. jr says:

    Serf’s Up

  2. preventCAPS says:

    And when Comcast buys TWC they will have even more consumers to rip off like this! It’s Comcrapstic!

  3. me says:

    85.53 on amazon at 5 a month that is ~17.106 months and you are in the green. Remember fees never go down once they have recouped the cost.

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  • CL: Exactly . ..they want cord cutters pay extra to make up for their loss of revenue for TV....
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  • Limboaz: It's like if I order something online and get it delivered. It would be like UPS charging both the shipper AND the receiver for shipping costs. It's t...
  • Angel: I called TWC and they reduced my bill by $20 a month and they added DVR, STARZ, bonus channels, and upgraded my internet speed! Thanks for the help!! ...
  • James R Curry: For what it's worth, I've had Time Warner's 300mbps service for about a year, and it has consistently given me speeds of around 322mbps, which I can't...
  • Limboaz: A billion dollars seems like a steal when you consider how big Toronto is. Meanwhile the cable ISP's down here in the States plot how they can jack up...
  • sandiegohdtv: In another part of my town, Cox offers this program as well. However, they offer it all year round and I believe you can register for it online....
  • sandiegohdtv: Made a huge error. It was 15 mbps to 60 mbps. Sorry, for that as I thought the filing meant that, but I did check it over again. I found out when it w...
  • Phillip Dampier: It's a bit complicated depending on where you live and who serves you: Regardless of what we want, it is almost a certainty TWC's and Bright House'...
  • JayS: Could you clarify #1 & #7. It appears that the acquirer, Charter, only offers one (1) level of internet speed. I would expect they would unify al...
  • Phillip Dampier: You will end up keeping your existing modem for phone service only (at no charge) and your own purchased modem will supply Internet access only. It's ...
  • Phillip Dampier: This is likely because Time Warner management has curtailed some of their most aggressive promos this year, so the ones you can get now cost a little ...

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