Today, Senators Markey and Blumenthal released findings showing that consumers are paying extravagant rental fees for equipment to access pay-TV content.
The following can be attributed to John Bergmayer, Senior Staff Attorney at Public Knowledge:
“Consumers often find themselves paying much higher rates for cable TV and other communications services due to the prevalence of ‘below-the-line’ fees—miscellaneous charges that are tacked on to their service that result in unexpectedly high bills.
“Today's findings from Senators Markey and Blumenthal highlight how set-top box rental fees are a large part of this. The average cable household spends hundreds of dollars on device rental fees annually, generating nearly $20 billion dollars for the cable industry per year.
“If cable subscribers require their customers to use particular equipment to watch programming, then that equipment is part of the service, not some optional extra. Companies should be clear to their customers and in their marketing materials what the true cost of their service is, and they should not charge premium prices for what, at this point, are entry-level features, such as HD, DVRs, and multi-room playback.
“More fundamentally, though, the best way to reform this market would be to introduce competition. Although Congress directed the FCC almost 20 years ago to create standards that would make it so that subscribers did not need to rent a set-top box from their provider just to watch the programming they pay for, success in this area has been, as today's report demonstrates, extremely limited, with 99% of cable subscribers renting devices from their providers. Although some subscribers have benefitted from third-party CableCARD devices, the vast majority of cable subscribers still rent cable-provided equipment and interact with their programming through a cable-provided user interface. This lack of competition leads to customers paying high fees for outdated devices.
“Fortunately, an independent advisory committee at the FCC is tackling this issue, and a new solution for third-party, competitive devices may be forthcoming. Public Knowledge hopes that these findings will highlight the urgency of this task.”
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