There was a time when cable operators picked a box, generally from Motorola (MOT) or the Scientific Atlanta division of Cisco (CSCO). They rented the device out to customers and probably made a very god buck.
The FCC has mandated that consumers be able to buy their own boxes, on the basis that competition is a good thing. That does not always work, as people learned with the break-up of the original AT&T.
The cable guys say that all of these new boxes, with digital feeds and one billion channels, are more expensive, so they will need to raise the price that they charge. Comcast (CMCSA) and Time Warner Cable (TWC) say that the new mandate will make cable more expensive for consumers.
Passing along costs may be a way for the cable companies to cut their own throats. With Verizon (VZ) and AT&T (T) coming to market with fiber-to-the-home, the best move they could hope for is rising cable TV rates. A door that is barely open for them because cable is the incumbent, could be pushed ajar by a spike in charges from the like of Comcast.
Cable has a big lead, but industries have squandered leads before.
Douglas A. McIntyre can be reached at [email protected].
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