How Much Does a Cable Box Really Cost? The Industry Would Prefer You Don't Ask (latimes.com)

The FCC chairman insists that he is driven by a market-based approach to regulation. In a story, published Tuesday, an LA Times columnist uses the simple example of set-top boxes to argue the agency has, instead, been captured by the industry it regulates. From the story: Spectrum TV and internet customers will see their rates go up again in November. Among other increases, the broadcast TV surcharge will rise to $9.95 from $8.85 a month, and the monthly fee for a set-top box will jump to $7.50 from $6.99. It was that last charge that got my attention -- and got me thinking about the economics involved. How much do cable boxes actually cost? Why do their monthly fees keep going up when the cost of similar technology, such as TVs and computers, goes down over time? Not surprisingly, my attempts to answer these questions were met with stonewalling from industry players.

Spectrum, owned by Charter Communications, the dominant pay-TV company in Southern California, clammed up real fast when I asked how much they pay for the boxes they lease to subscribers. Nor would it comment on how much cash flow the boxes generate, or why fees keep rising even as the number of residential TV subscribers dwindles (down 66,000 more in the third quarter). Dennis Johnson, a company spokesman, said only that the 7.3% higher box charge in November -- more than three times the inflation rate -- represents a "modest increase" that is "comparable or even lower than our major competitors."

Comments

Comparables

[Mr D from 63]

There is nothing complicated about a cable box. Comparable electronics with a tuner and an HDD for DVR storage would likely run in the $35 to $55 range wholesale. Maybe lower.

Comcast won't give a static IP without their modem

[t0qer]

Had this issue pop up recently.

A few years back customer opens shop. After 3 shitty comcrap modems, we buy our own. Comcast at the time has no issue, we have a static IP set and it's set for 3 years. FF to last week. Customer can't connect via VPN, lotta other people depending on that static IP can't connect. I call comcast and they start troubleshooting.

Apparently they changed their policy. No static IP if the customer is using their own modem. Nope, we can't have our old IP back, big FU. We have to pay $19.95@mo + $10 modem lease to get a static from them now. Never mind that this is a bonafide business account. Cable companies are worse than lawyers and politicians, and that's a pretty low bar as is.

Re:Comcast won't give a static IP without their mo

[omnichad]

Charter (Spectrum) is worse. No static IP without a business account. No customer-owned modems allowed for business accounts at all. They claim it's to "maintain the quality of their business network" as if they're using different channels or nodes for business customers.

Re:I used to work for Comcast.

[hey!]

While it's always *possible* to build something more expensive than it needs to be, you used to be able to buy a CableCard tuner retail for around $100.

According to the old regs at least, the cable companies were banned from providing equipment with integrated encryption. They had to use a removable CableCard, so that instead of leasing a device from them you could purchase your own device and transfer the CableCard to your own equipment. The thing is, very few people knew about this, and the cable companies didn't go out of their way to inform them. The kind of people who knew are the kind of people who are cord cutters anyway.

The ban expired in 2015, which not coincidentally was when a new, encryption integrated cable box appeared on my doorstep -- which was quite manifestly a cheap P.O.S.; I'd be amazed if it cost the cable companies more than $20 to acquire in bulk. CableCard boxes are no longer available from retailers.