Finance

TW Cable Raises Modem Rental Fee

Fee Rising From $3.95 to $5.99 Per Month For Most of the MSO’s Broadband Subs 7/29/2013 1:16 PM Eastern

Time Warner Cable confirmed that it is increasing its monthly cable modem rental fee from $3.95 to $5.99 per month for most of the MSO's residential high-speed Internet customers.

DSL Reports reported of the fee adjustment on Monday, posting an alert that was delivered to some TWC customers recently that noted that the change is coming as the MSO increased the speed of its most popular tier over the past year alongside its expanding rollout of Wi-Fi hotspots.

A TW Cable spokeswoman said the MSO began notifying customers of the new rental fees on Sunday and will continue to alert all other customers who are subject to the new fee throughout the current billing cycle.

The new $5.99 monthly cable modem rental fee applies to the majority of new and existing TWC cable modem subscribers. The exception is customers who signed on between May 9 and August 9 of this year; subs in that group are paying $4.99 per month, the spokeswoman said.

TWC customers who take the MSO’s premium level SignatureHome service package bundle have been exempt from the cable modem fee since its introduction, the company confirmed.  SignatureHome features elements such as a multi-room DVR, the MSO’s high-end Internet tier, and digital phone service with VoiceZone, plus access to a personal solutions advisor” and specially trained field technicians and installers.

Time Warner Cable unleashed its $3.95 modem fee for existing customers in the fall of 2012, about a year after the MSO started to apply to fee to new customers.

The new rental policy is also entering play as the MSO raises rates on its Internet service by an average of $3 per month alongside changes and additions to its optional  usage-based Essentials Internet tier targeted to lighter users.

TWC said the new rental fees are to help cover costs of network upgrades and the cycling out of older modems in favor of new devices that can take advantage of the faster speeds.

Time Warner Cable has rolled out DOCSIS 3.0 platform that offers at least 50 Mbps downstream in all markets.  The MSO offers up to 100 Mbps in Kansas City, where TWC happens to be facing off with Google Fiber, and 75 Mbps down in Dallas. TWC intends to “expand the availability of the faster speeds to other markets over time,” the spokeswoman said.

TWC customers have the option of buying a modem at retail, and has posted a list of supported models.  Customers who take that route and also subscribe to the MSO’s VoIP service are required to lease an embedded multimedia terminal adapter from TWC.

TWC doesn’t disclose how many of its 11.06 million residential cable modem customers purchase their own modems, but it represents a “small number of customers,” the spokeswoman said, noting that those who lease are subject to tech support that they don’t get for devices purchased at retail.

Time Warner Cable is scheduled to report second quarter results on Thursday, Aug. 1.

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