Comcast Hikes Cable-Modem Fee to $5

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

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.

Alternatively, customers may opt to purchase a cable modem instead of leasing one; for example, Motorola's SB6120 DOCSIS 3.0 costs about $100 from retailer Fry's Electronics.

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 would stand to generate more than $200 million in additional annual revenue from the increase in cable-modem fees, assuming at least two-thirds of all subscribers lease modems from Comcast.

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-Megabits-per-second downloads for consumers and earlier this month launched a 100-Mbps service for businesses in Minneapolis-St. Paul.