Zoom Says FCC Should Block Charter-TWC

Modem maker Zoom Telephonics has asked the FCC to deny the Charter-Time Warner Cable merger, primarily over the issue of access to third-party modems.

Since 2012, Charter has bundled the price of leasing its modems into the overall price of service, which Zoom has said gives customers no financial incentive to purchase their own devices. Zoom also petitioned the FCC to deny the Comcast-TWC deal over the issue, saying that if the FCC did approve that deal--it didn't--it should condition that approval on Charter stating an unsubsidized price for leasing cable modems and not “unreasonably” refusing to allow “nonharmful” modems to attach to its network.

In its petition to deny the Charter-TWC deal, filed Tuesday (Oct. 13), Zoom repeated its charge that bundling the price means there is not savings for customers who opt for their own cable modems.

Zoom says that most of the third-party modems Charter has certified for use are not available at brick-and-mortar retailers, and others are not readily available. But even when they are available, it says, the bundled pricing discourages customers from purchasing them.

Charter says it will extend its policies to Time Warner Cable, which does not provide comfort to Zoom since Time Warner Cable has certified its devices, while it says Charter has been "hostile" to third-party modems, like Zoom's.

"There is no assurance that Charter will allow existing TWC and BHN customers to attach Zoom modems in the future or even to continue using Zoom modems they already possess."

"Zoom and cable modem retailers will be harmed by the approval of these transfers of control," it told the FCC. "The public will also be harmed because Charter’s policies reduce a Charter customer’s cable modem choices and also attack retailers’ cable modem sales and associated incentive for offering a broad range of cable modems to their customers."

Charter has said that not charging a separate modem fee is good for subscribers. The Stamford, Conn.-based MSO said its decision to bundle the price of the modem, as well as taxes and Universal Service fees, was a way to give its customers “greater transparency about the services they are paying for” and to reduce “bill shock.” The bundled price is still lower for a higher-speed service than its competitors offer, Charter said, even with the lease fee.

Charter has a list of modems it argues meet the requirements for the functionality needed on its systems, and that modems that don’t meet that standard — and pass Charter’s testing — could harm the network and prompt customer complaints to the ISP. Zoom has argued that the standard is unreasonably high and meant to discourage third-party modems, such as its devices.

Charter told the FCC in a filing earlier this year that it had reached out to Zoom to get the company to submit its modem to cable operator’s certification process. The MSO said that Zoom informed it that without Charter breaking out the price of modem rental, it did not wish to do so.

“Charter’s proposed transactions with Time Warner Cable (TWC) and Bright House Networks (BHN) is receiving broad support," said the company in a statement followng various petitons to deny filed Oct. 13. "To date, there are hundreds of positive comments filed with the FCC from a broad and diverse array of voices, including Netflix; civil rights groups like the Hispanic Leadership Alliance; independent programmers TV One, Bounce TV Fuse (formerly Nuvo) and One World Sports, as well as from dozens of local businesses and community organizations.

"We recognize that there are also parties who challenge the benefits of the proposed transactions. We are listening to them and have addressed many of the issues they have raised with commitments such as those about expanding access to fast broadband, preserving an Open Internet and investing in interconnection, enhancing customer service by adding more highly trained employees for our call centers and field technician operations. We look forward to continued engagement with regulators, interested parties and members of the communities we serve about the significant public interest benefits of the transactions.”

John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.