Comcast Hiking Cable-Modem Fee to $5 From $3 Monthly Nationwide
Operator Cites Cost for DOCSIS 3.0 Equipment for Hike
by Todd Spangler 9/15/2009 4:35:54 PM EDT

Comcast this fall will increase the monthly lease fee for cable modems to $5 nationwide -- a 66% increase over the current $3 monthly fee -- which the operator said is necessary to offset the cost of rolling out next-generation services such as DOCSIS 3.0 equipment.

In a statement, Comcast said: "We continually invest in providing customers with next-generation equipment and technology that delivers advanced voice and Internet services with enhanced capabilities. Our costs for this new equipment will increase by 167% over the next two years. As a result, we will increase modem equipment charges by $2."

Comcast said the increases will occur market-by-market but in general will begin this fall.

The operator has started notifying customers in California and Washington state of the rate increases, which will go into effect in those states in October. For cable TV service, the average rate increases in California and Washington will range from 1.6% to 2.7%.

At the end of June, Comcast reported 15.3 million high-speed Internet customers. That means the operator stands to generate more than $360 million in additional annual revenue from the increase in cable-modem fees.

Comcast is aiming to deploy DOCSIS 3.0 to 40 million of the homes passed in its service areas by the end of this year, with full coverage by 2010. The cable modem technology allows for higher connectivity rates by "bonding" multiple 6-MHz channels together: Comcast offers a top tier of 50-Mbps downloads for consumers and earlier this month launched a 100-Mbps service for businesses in St. Paul/Minneapolis.