Does the FCC limit how much can be charged for a CableCARD??

[Heckler]

Extended family lives in Maricopa, AZ. (a town ~25 miles south of Phoenix) and they've got an incumbent Cable provider, Orbitel Communications (they wired all the new developments in exchange for exclusive franchise agreement with the city, and required payment for basic analog cable in many of sub-development's monthly HOA dues)... Problem is that they want $9.95/month for a CableCARD!! That's the same price they charge for a High Definition Digital Set-Top Converter (that ironically, if it's an OCAP-compliant model, has a CableCARD installed in it)!

Don't believe me, check their rate card:
http://www.orbitelcom.com/wp-content/up ... ochure.pdf

I was wondering if the FCC had established that the rental fee for a device could not exceed some percentage of the value of the device...? At $9.95/month this amounts to 10% and you've paid the same as the "Lost/Damaged" charge for the CableCARD in 10 months.

Yes, they've already asked if they can just buy a CableCARD outright for the Lost/Damaged fee or provide their own, and they've been told "no".

I can't help but think that Orbitel is bundling the Digital/HD service fee with the hardware rental fee (which I thought the FCC had banned?)...

COX Communications in Metro Phoenix only charges $2.00/month, but that doesn't hold any sway with Orbitel...

http://ww2.cox.com/residential/arizona/tv/pricing.cox

They've already filed a complaint with the FCC, which Orbitel acknowledged receiving some months ago, but they've changed nothing. Any suggestions?

[richard1980]

Yes, it is covered by law. The rates for renting equipment are covered in 47 CFR § 76.923, paragraphs c, d, f, and g. For it to make sense, you have to read the paragraphs in reverse order.

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(g) Other equipment charges. The monthly charge for rental of converter boxes and other customer equipment shall be calculated in the same manner as for remote control units. Separate charges may be established for each category of other customer equipment.

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(f) Remote charges. Monthly charges for rental of a remote control unit shall consist of the average annual unit purchase cost of remotes leased, including acquisition price and incidental costs such as sales tax, financing and storage up to the time it is provided to the customer, added to the product of the HSC times the average number of hours annually repairing or servicing a remote, divided by 12 to determine the monthly lease rate for a remote according to the following formula:

     Monthly Charge = (UCE + (HSC x HR)) / 12

Where, HR = average hours repair per year; and UCE = average annual unit cost of remote.

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(d) Hourly service charge. A cable operator shall establish charges for equipment and installation using the Hourly Service Charge (HSC) methodology. The HSC shall equal the operator's annual Equipment Basket costs, excluding the purchase cost of customer equipment, divided by the total person hours involved in installing, repairing, and servicing customer equipment during the same period. The HSC is calculated according to the following formula:

     HSC = (EB-CE) / H

Where, EB=annual Equipment Basket Cost; CE=annual purchase cost of all customer equipment; and H=person hours involved in installing and repairing equipment per year. The purchase cost of customer equipment shall include the cable operator's invoice price plus all other costs incurred with respect to the equipment until the time it is provided to the customer.

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(c) Equipment basket. A cable operator shall establish an Equipment Basket, which shall include all costs associated with providing customer equipment and installation under this section. Equipment Basket costs shall be limited to the direct and indirect material and labor costs of providing, leasing, installing, repairing, and servicing customer equipment, as determined in accordance with the cost accounting and cost allocation requirements of § 76.924, except that operators do not have to aggregate costs in a manner consistent with the accounting practices of the operator on April 3, 1993. The Equipment Basket shall not include general administrative overhead including marketing expenses. The Equipment Basket shall include a reasonable profit.

(1) Customer equipment. Costs of customer equipment included in the Equipment Basket may be aggregated, on a franchise, system, regional, or company level, into broad categories. Except to the extent indicated in paragraph (c)(2) of this section, such categorization may be made, provided that each category includes only equipment of the same type, regardless of the levels of functionality of the equipment within each such broad category. When submitting its equipment costs based on average charges, the cable operator must provide a general description of the averaging methodology employed and a justification that its averaging methodology produces reasonable equipment rates. Equipment rates should be set at the same organizational level at which an operator aggregates its costs.

(2) Basic service tier only equipment. Costs of customer equipment used by basic-only subscribers may not be aggregated with the costs of equipment used by non-basic-only subscribers. Costs of customer equipment used by basic-only subscribers may, however, be aggregated, consistent with an operator's aggregation under paragraph (c)(1) of this section, on a franchise, system, regional, or company level. The prohibition against aggregation applies to subscribers, not to a particular type of equipment. Alternatively, operators may base its basic-only subscriber cost aggregation on the assumption that all basic-only subscribers use equipment that is the lowest level and least expensive model of equipment offered by the operator, even if some basic-only subscribers actually have higher level, more expensive equipment.

(3) Installation costs. Installation costs, consistent with an operator's aggregation under paragraph (c)(1) of this section, may be aggregated, on a franchise, system, regional, or company level. When submitting its installation costs based on average charges, the cable operator must provide a general description of the averaging methodology employed and a justification that its averaging methodology produces reasonable equipment rates. Installation rates should be set at the same organizational level at which an operator aggregates its costs.

It is quite possible that this works out to $9.95 for a CableCARD. It is also possible that it works out to $9.95 for a cable box with no CableCARD in it. Which means that when you rent both of them as a complete unit, the cost should be $19.90 total ($9.95 for the box plus $9.95 for the CableCARD). If that is what they are doing, then there's nothing wrong with that. However, if they are saying that a cable box plus CableCARD costs the same as just a CableCARD with no box, then that is illegal and you should file a complaint with the FCC.

[Heckler]

Wow, I didn't expect to get quotes of the relevant code...!! Unfortunately, it also has unknown drivers/variables that only Orbitel knows (or can "manufacture" to justify their $9.95 rental fee)...

Orbitel isn't "saying that a cable box plus CableCARD costs the same as just a CableCARD with no box", they are merely charging the same price for either a CableCARD or a High Definition Digital Set-Top Converter (when we all know that the two do not have equal acquisition+installation+support costs). That said, I was making the observation that, if Orbitel is using relatively newer High Definition Digital Set-Top Converter boxes, they are most likely OCAP-compliant and thus have CableCARDs installed in them (for which I do not believe Orbitel is charging an additional CableCARD rental fee). Orbitel is also renting a "Digital Set Top Converter" (non-High Definition) for $6.95/month, which could also be OCAP-compliant and have a CableCARD installed within.

Any way you look at it, it is stupefying that they are asking $9.95/month for a CableCARD with no purchase/BYO option...

[richard1980]

Orbitel isn't "saying that a cable box plus CableCARD costs the same as just a CableCARD with no box", they are merely charging the same price for either a CableCARD or a High Definition Digital Set-Top Converter

they are most likely OCAP-compliant and thus have CableCARDs installed in them (for which I do not believe Orbitel is charging an additional CableCARD rental fee)

Those two statements contradict each other. If Orbitel is not charging an additional CableCARD rental fee for their set top boxes, then they are saying the cost of a cable box plus CableCARD is $9.95. Their rate card says a CableCARD by itself is $9.95. So if they are not charging an additional CableCARD rental fee for their set top boxes, they are in fact saying that a cable box plus CableCARD costs the same as a CableCARD with no box. And that directly violates the law that regulates the pricing.

If you can confirm that is in fact what they are doing, then I would file a complaint with the FCC.

Something else that I find interesting is their "lost item" fees. As I quoted above, the law says the cable companies are supposed to divide their costs by 12 to get the monthly lease fee. If the monthly lease fees are multiplied by 12, you can see what each item's overall cost should be. Compare that to the "lost item" fees on the rate card. Clearly something is wrong.

[erkotz]

If you are a Ceton customer, please open a ticket with us and PM me the ticket number. We will help out here. I agree that charging the same price for the STB is highly suspect, and likely not allowed.