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Boston Herald

By JAY FITZGERALD

Cable customers could get socked with higher monthly fees under a current plan designed to introduce competition for the digital boxes that allow programming to be streamed onto television screens.

On July 1, all new cable subscribers will be required to have standard set-top boxes that can work with any cable provider - whether it's Comcast, RCN, Time Warner or others.

The idea, ordered by Congress in the 1996 Telecommunications Act, is to allow customers to purchase uniform boxes at Best Buy, Radio Shack or other retailers, rather than exclusively renting boxes from individual cable companies, which make big bucks from their monthly rental fees.

Those with existing cable service will not be affected, unless they move to a new address and require reinstallation of cable services.

But now cable companies are pushing for last-minute changes and waivers from the Federal Communications Commission, as the July 1 deadline approaches. They argue the new boxes, which would require special secure cards to be inserted into boxes to activate cable services, will cost more money and inhibit services and technological innovation.

Customers signing up for cable service after July 1 can continue to rent set-top boxes from cable companies. But the increased cost of the more sophisticated boxes means monthly rental fees will rise, by anywhere from $2 to $3 extra per month, cable providers say. Current box rental fees run anywhere from $3 to $9 a month.

`It's really going to impact the customers," said Tom Steel, vice president of regulatory affairs for RCN Corp., which is now asking for a waiver from the FCC to avoid implementing the new plan come July. "We can't see any consumer benefits to this."

Meanwhile, Mike Lynch, head of Mayor Thomas Menino's cable operations office, expressed concern that rental prices will rise - and outside retailers won't have enough boxes available for those who want to buy them.

"There's no motivating reason for this," said Lynch.

The concept of introducing competition for set-top boxes is sound, he said, comparing it to when telephone companies used to exclusively rent phones to customers who didn't have the option of buying their own devices. All that changed when the phone industry was deregulated decades ago.

But the cable set-top box question today, Lynch said, is a matter of implementation and timing.

Others counter that cable companies have had more than a decade to prepare for the switch - and their current complaints have more to do about keeping their lucrative, multibillion-dollar box rental business intact.

"They don't want competition," said James McQuivey, an analyst at Forrester Research, adding cable companies have previously delayed implementation of the new law.

In the short-term, prices will probaby rise, he said. But in the long-term, customers will see savings as competition is introduced to the set-top box market.

As television programming and technology become more sophisticated in the digital era, set-top devices will become more expensive - making competition for set-top boxes more essential, proponents say.

Jason Oxman, a spokesman for the Consumer Electronics Association, said the electronics industry is prepared for July 1 and already has high-end products on the market for customers who want all the digital bells and whistles for their televisions.

Manufacturers are also producing "cable-ready" television sets that already have the new techology installed, he said. (Those with older "cable-ready" televisions may be affected, depending on the age and make, according to industry officials.)

Oxman said it's "ironic" that some cable companies are now pushing to delay introduction of the new set-top boxes in order to wait for "downloadable' technology to develop, rather than using special cards to activate cable service. "They were the ones who first proposed the (card) system," said Oxman.

(c) 2007 Boston Herald. Provided by ProQuest Information and Learning. All rights Reserved.