the market time to develop, and from there, it's a matter of customer demand and manufacturer innovation," he said. Efforts to contact Circuit City headquarters were unsuccessful. The FCC and a trade group representing the electronics industry say the government's action will spur more models.
The problem consumers face now is how long it will take for a box to pay for itself. With boxes costing $130 and up, it would take 18 months to make it worthwhile to buy one instead of paying $7 a month to rent one from Comcast. It would take longer for higher-end models costing several hundred dollars with digital video recorders and high-definition compatibility.
Comcast has the FCC-compliant boxes available without an additional cost for now, spokesman Ray Purser said. "While there is currently no price change for customers, we will be forced to increase the lease price customers pay for these boxes, at some point, to cover these FCC mandated costs," he said. Customers are not required to have the new boxes, but Comcast is required to distribute them from now on.
If a customer requests one or, for example, upgrades to a DVR, Comcast will give them the new model with the cable card included. The company hasn't decided whether to pass on the additional costs to all subscribers or only the ones who get the new boxes, Purser said. Customers who buy their own boxes or TVs with cable-card slots will have to pay Comcast $1.
75 a month to lease the cable card, Purser said. All cable customers should expect set-top box lease costs to increase $2 to $3 each month, said cable and broadband industry analyst Mike Paxton of In-Stat, a technology research and analysis firm. On average, customers now pay $5 to $7 a month to lease set-top boxes, said Joy Sims, spokeswoman for the National Cable and Telecommunications Association, which lobbied against the rule.
"There's no real consumer benefit," she said. "This just raises the cost of the boxes." FCC spokeswoman Mary Diamond said customers will eventually benefit because more companies will start making the boxes, so there will be more competition.
"You'll see more innovation," she said. Until now, companies such as Scientific Atlanta, a division of Cisco Systems, and Motorola have dominated the set-top box industry because they sell directly to the cable companies, she said. Paxton was critical of the FCC rule for a couple of reasons.
First, the leasing model works, he said. When boxes malfunction or become obsolete, customers can trade them in instead of having to spend a lot of money for a new one. "It would require a change in consumer behavior," he said.
Unless customers can get special features or big cost savings, they'll continue to lease, he predicted. the market time to develop, and from there, it's a matter of customer demand and manufacturer innovation," he said.
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