Time Warner Cable customers who bought modems may have to pay rental fee after Charter takeover

Thousands of Time Warner Cable customers who bought their own modems for high-speed Internet service could end up paying to rent one anyway after Charter completes its proposed purchase of the company. Charter is the only major pay-TV provider that bundles the rental fee for a cable modem into its price for Internet service, so there's no discount for customers who buy their own device. Its unusual policy could have a major effect in Los Angeles (CA), where the company is set to become the dominant pay-TV provider with about 1.8 million subscribers. In the coming months, federal regulators are expected to approve Charter's $56.7-billion purchase of Time Warner Cable, as well as a separate $10.4-billion acquisition of Bright House Networks, deals that would make Charter the nation's third-largest pay-TV firm with more than 20 million subscribers.

A leading manufacturer of retail cable modems, Zoom Telephonics Inc. in Boston (MA), wants the Federal Communications Commission to reject the deals because of the cable modem policy. And if not, Zoom wants a condition for approval to require that Charter separate its cable modem rental fee so customers who buy their own devices can get a break on their bills."The Communications Act says that cable companies should sell cable modem leases and Internet service separately," said Andrew Jay Schwartzman, a professor at Georgetown University Law Center who is representing Zoom."By combining the prices, Charter's customers are deprived of the ability to purchase advanced cable modems and save the cost of monthly rental fees," he said.