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Fee hike will generate an extra $150 million for Time Warner

Time Warner Cable announced yesterday that it had begun notifying customers of an increase on the rent paid each month for cable modems (subscribers to the company's base cable internet plan have been paying $3.95 per month to lease a modem since last November).

Time Warner Cable is now increasing the monthly rate for leasing the modem to $5.99 per month starting with the next billing cycle. A few dollars doesn't sound like huge hike, but the additional fee will reportedly generate an extra $150 million in revenue this year alone for the cable giant.

Apparently, only customers on the company's most popular plan will pay the extra fee for modem rental. Customers who are on more expensive and higher-end cable internet packages won't be affected by the change in rental rate.
 
Time Warner Cable says that the fee hike stems from costs associated with providing the modem.

Despite the fact that the lease amount has increased to $5.99, Time Warner Cable’s fee is still lower than competitors such as Comcast, which charge between seven dollars and eight dollars per month.
 
Of course, one way to avoid the fee altogether is to purchase your own modem from Time Warner Cable’s approved list. By going this route, the modem would “pay for itself” within a year or less.

Source: Reuters



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All around smart move
By CaedenV on 7/30/2013 10:22:52 AM , Rating: 2
When they introduced the $4 rental fee earlier this year in my area I was very quick to purchase my own cable modem, and now I am very happy that I did.
The big issue is that (at least in my area) they are requiring a docsis 3 device if you are going to purchase your own, and those are not very cheap. Ironically the device I replaced was docsis 2, so obviously it will technically work on the network, but they will deny activation because (according to the customer service rep I talked to) docsis 2 devices "will not be compatible with the network in the near future".
But the thing is that the only people who really care are the power users who suck down the most usage anyways... they don't exactly care if they loose my business because I am not very profitable. Plus there is the issue that the only direct competition in my area is Cincy Bell who has similarly outrageous rental fees and only offers DSL on my street which is a no-go. However, I did see some people working on the lines yesterday, and I think they were installing a fiber line for my street, so maybe I will soon be able to pit the two companies against each other and try and get a better deal once that is up and running.

Anywho, $80 takes almost 2 years to pay off at $4/mo, but at nearly $6 the payoff comes much faster, and the modem I bought is of much better quality than anything they would ever provide.




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