Cable firms to raise set-top box rates

Time Warner Cable Inc. spokesman Alex Dudley said the company agrees with the cable industry’s stance that the FCC cable card rule is a “tax” on consumers. New York-based Time Warner is the second-largest cable company with 13 million video subscribers.

The FCC has said that it’s time for cable operators to comply with the law, especially since the industry had already been granted extensions.

The American Cable Association, which represents 1,100 smaller cable operators, said their members will be charging more for set-top box rentals.

“It’s guaranteed,” said Ross Lieberman, vice president of government affairs for the trade group. “We can’t absorb this cost. This rate will be passed along to consumers.”

He said the increases would likely come when cable operators typically raise rates: in early January after an announcement in late December.

The cable industry is upset that the FCC on Friday denied its petition for a blanket exemption to the cable card mandate and yet granted a temporary one to Verizon Communications Inc. New York-based Verizon is rolling out its fiber-optic television, phone and Internet service.

The FCC said Verizon provides needed competition against cable. The agency also gave waivers to several other video providers, including those that roll out all-digital systems by Feb. 17, 2009.

“The commission’s 11^th-hour action on the many long-standing waiver requests doesn’t bode well for consumers,” said Rob Stoddard, a spokesman for the National Cable and Telecommunications Association in Washington. “There’s nothing in these decisions to stave off a $600 million set-top box tax likely to affect the great majority of cable customers while providing no benefit to consumers.”

But Chris Murray, senior counsel at Consumers Union in Washington, said it’s convenient for cable companies to blame regulators when they’ve stalled about complying with the FCC rule for years. Cable operators also have had no problem raising rates regularly for various reasons.

“They raise rates three times faster than inflation every year, for more than a decade,” he said. “Cable companies want to have absolute control. We don’t think they should have it.”

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