CableCARD Aftermath: Oh, Who to Blame for Looming Set-Top Fee Hikes?

The cable industry may soon face another PR battle—this time over imminent set-top rental hikes following the FCC‘s refusal to grant most of the industry’s requests for waivers of the Jul 1 CableCARD deadline (Cfax, 7/3). Following an AP story that hit the wires Wed night and alerted the general public that box rental fees could go up $2-3 per month, a few MSOs told Cfax that they got some calls from local media outlets Thurs seeking more details. The industry is working hard to deflect blame for any future hikes to the FCC, which largely rejected the industry’s arguments against mandating separable security in set-tops. "Unfortunately, these are just the facts," said ACA pres/CEO Matt Polka. "The FCC’s regulations mean that box costs will go up for the same services customers are receiving today… this is in direct response to FCC action or, more appropriately, inaction on the unique concerns of smaller market and rural consumers." The NCTA, which lost its bid for a blanket industry waiver and said it also got a few local press calls on Thurs, already declares on its Web site that the separable security mandate "will likely cost cable consumers more than $600 million dollars per year in higher prices while offering no tangible benefits." MSOs are being cautious. A Cox rep said no immediate hikes are planned but "increasing costs may be passed on in the future." A Comcast rep reported also receiving several calls from local media on Thurs seeking more info, noting that many are unfamiliar with the scope of the FCC’s role. Comcast, which failed to win a waiver for its low-end boxes and now predicts the cost of those units to roughly double, continues to tell reporters that the CableCARD mandate "amounts to an FCC tax of hundreds of millions of dollars on consumers with no additional benefits." Ditto at the NCTA: "Our intention is absolutely to point the finger at the FCC for this unnecessary mandate that will raise prices for no consumer benefit," said a rep. FCC chmn Kevin Martin, meanwhile, has trumpeted his expectation that separable security will finally lead to widespread retail availability of set-top boxes. Only time will tell whether that happens—or whether stories about looming cable price hikes in local papers bring about the kind of ire that vexed the industry in the ’90s. It appears that this time cable is ready to fight.