News

Group Calls For Modem Price Regulation

8/07/2002 4:23 PM Eastern

Washington -- A newly formed business coalition is asking federal regulators
to price regulate cable modems to block cable operators from undermining the
retail modem market.

The proposal was advanced Tuesday by the Cable Modem Coalition, which
describes itself as a collection of cable modem manufacturers and retailers,
though none of them disclosed its name in the Federal Communications Commission
filing.

The CMC claims that cable operators are increasingly unwilling to provide
monthly service discounts to consumer that own cable modem. This effort is
destroying the economic incentive for consumers to acquire modems and
undermining the forces needed to create a vibrant retail cable modem market.

The CMC called on the FCC to require cable operators that supply cable modems
to list the fee separately on monthly bills and set the minimum monthly modem
price based on a formula crafted by the FCC. Retailers that believe cable
operators are not following the formula could file a complaint at the FCC.

'Without such measures, cable broadband service providers will consolidate an
effective monopoly over the supply of cable modems that ultimately could lessen
innovation and mask higher service charges to consumers,' the CMC
said.

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