Comcast to Spread Cost of CableCARD Set-Tops

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Comcast expects to increase fees to both new and existing subscribers to recover the higher costs of CableCARD-based set-top boxes, which most cable operators will be required to deploy starting July 1 under the Federal Communications Commission’s so-called integration ban.

Comcast eventually will apply incrementally higher fees across all markets, including those price-regulated by the FCC.

“We’ll recover our costs,” Comcast senior director of communications for government affairs Sena Fitzmaurice said. “We plan to recoup the cost of the [CableCARD] boxes.”

But it’s not yet clear how much higher fees will be because of the FCC’s CableCARD mandate.

According to the National Cable & Telecommunications Association, the work necessary to enable set-top devices to work with CableCARDs will add approximately $72-$93 to each set-top. The association has claimed that this translates into $2-$3 more in monthly lease charges to consumers.

However, Comcast does not intend to charge extra fees for only those subscribers with CableCARD-based boxes. Rather, the cost of CableCARD set-tops will be averaged with the cost of set-tops with integrated security features or otherwise spread among existing subscribers.

Under FCC regulations, in markets where a cable operator is deemed to not be subject to “effective competition,” local franchise authorities regulate rates for equipment and installation services based on an average of costs reported by the cable operator. Operators must file updated equipment and installation charges annually.

Comcast most recently filed those cost calculations companywide for regulated markets this spring. When the operator updates its equipment and installation charges in the spring of 2008, the costs associated with CableCARD boxes that have been deployed this year will be factored in.

In unregulated markets -- where competitors have sizable share -- Comcast’s individual systems will determine how to recoup CableCARD costs. Extra fees may be incorporated into certain levels of service, such as digital-cable tiers, or take the form of an additional box charge, according to the company.

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