Is the Cost of a Cable Box Really Too Darn High?

AlphaAtlas

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A recent poll found that most Americans think cable is way too expensive, and the monthly fee subscribers pay for a cable box makes up a good chunk of that expense. Prices for those boxes seem to keep going up, even as streaming boxes and other computers get cheaper. David Lazarus of the LA Times was determined to find out why, and he found... almost nothing. And not from a lack of trying. The journalist contacted multiple Spectrum spokesmen, and "went knocking at the door of Arris International, the world's largest supplier of set-top boxes to pay-TV companies." He went to DirectTV, Cox Communications, Comcast, and got a big fat "no comment" from all of them, noting that several U.S. Senators got the same response. Some Wall Street analysts said they have no idea how much the boxes cost to manufacture, but suggest that Arris sells them for $150-$250 each.

If the FCC was right about the average customer paying $231 a year (as of 2016), that suggests the typical pay-TV company is recouping its investment per box in about a year or less, and all fees paid beyond that point are pure gravy, even allowing for any maintenance expenses. Each analyst I spoke with said box fees aren't a huge source of revenue for pay-TV companies, but they obviously add up. Charter, for example, still has more than 16-million residential customers with set-top boxes, many with multiple boxes. After the Spectrum fee rises within days to $7.50 a month, that will translate to at least $120 million. Monthly. Or at least $1.4 billion a year. Rival Comcast charges $9.95 monthly for a high-definition box. It has about 22-million TV subscribers. It's thus looking at potential revenue of $2.6 billion annually. Yeah, if I ran a pay-TV company, I'd want to keep that to myself as well.
 

Shotglass01

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This actually was the straw breaking my coax. I had Cox, basically, analog, coming from the street in to the TV with no box or other conversion. The TV did the 'decoding' as I didn't have any pay channels. When they mandated the box and required rental fee, I cancelled. It wasn't about the money, it was the principal. I refused to be held ransom over bullshit rental fees that could be easily solved by allowing us to purchase the hardware.
 

Grimlaking

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Yea the home DVR boxes are a total ripoff in my opinion. They are NICE to have don't get me wrong. But the lack of expandability and the fact that you are forced to rent as opposed to buy your own... yea I'm out. I've cut that particular cord... dropped cable tv and the boxes went from 250 a month cable bill to 114. TYVM. Got Directvnow and am a happy camper.
 

Uvaman2

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If i didn't buy my router for 100$, I would have paid 1400$ (that is not an exaggeration).. and would have to return it when I cancelled, even being obsolete equipment and all. I don't know how an analyst can say this is not a significant amount of money... Pure profit or money for nothing is never insignificant.
 

Grimlaking

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This would be like Cell phone companies not letting you buy your phone but charging you 100 dollars a month just to USE a phone on their service and they get to pick the features and options you get and control what you can do with it.
 

nutzo

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This actually was the straw breaking my coax. I had Cox, basically, analog, coming from the street in to the TV with no box or other conversion. The TV did the 'decoding' as I didn't have any pay channels. When they mandated the box and required rental fee, I cancelled. It wasn't about the money, it was the principal. I refused to be held ransom over bullshit rental fees that could be easily solved by allowing us to purchase the hardware.
I had already built a HTPC with a regular dual tuner card to replace my old analog DRV (Replay TV).
I mainly did this so we could record the local HD channels that where free at the time.

I can't get anything on a OTA antenna, so I'm stuck with Cable or Satellite.
When they required a cable box, I invested in a cable card tuner.
Once it was setup (and they finally managed to get their side setup correctly) it's worked pretty well.
Would not be a solution for most people, as COX offers no real support for Windows Media center.
Technically they support it, but they have nobody locally that knows anything about it.
 

Spire3660

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This would be like Cell phone companies not letting you buy your phone but charging you 100 dollars a month just to USE a phone on their service and they get to pick the features and options you get and control what you can do with it.
We have already been here. ATT used to only allow their equipment on the phone network. They argued allowing other devices would destroy it. When parts of the 4G spectrum went up for auction, part of the stipulations was that whoever won the spectrum had to allow any device. Google even put in abid to make sure that stipulation went into effect. Verizon ended up winning and promptly ignored the stipulation. By all rights, they should lose their license to the spectrum, which is owned by the american people.
 

OnceOver

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First off most of the boxes (equipment) are total slow POS and considering what Aris, Pace, Motorola, etc... are charging for these units the TV companies are getting ripped off as well. A Roku running the spectrum app is 10x faster and pays for it's self in 6 months (less or more depending on model obviously). Plus the Roku can do A LOT MORE and can be placed anywhere it has internet access and power. Think about it.

That said...
It's not just how much the equipment cost to manufacture and sell, it's the cost to warehouse, ship, issue to techs at each sub-location (requires scanning system and intranet), continue tracking units, perform periodic inventory of all units, ship "defectives" (bad from cust. location (unit swap) and DOA) to refurbish center, "refurbish" (more on that later) and ship back to warehouse, ship back to sub-location, etc.... there is a lot of 3PL that helps mitigate cost, but that only helps so much. Oh and not to mention the huge amount of equipment loss (12-40% depending on company. I could mention the bad ones, but I'm not going to. Techs miss handle equipment, throw it away (cuz mad at "POS" equipment), steal hard drives (throw out casing), sell on ebay to dummy's, etc... techs are supposed to run through process to get stubborn equipment running (70% of units sent back as defectives just need a factory reset which can be done by the tech at your house), but instead they just head back to their vehicle and grab another unit. Considering the cost and effort around just this, the equipment should be a lot faster and able to do a lot more. Just a total lack of creativity IMO. If companies made a STB/DVR that did something a Roku couldn't... MAYBE it would be worth the monthly fee.
 
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For most cable and satellite companies, it's a total waste of money as you pay for equipment that you really don't need (in terms of functionality) and channels you don't care about. Streaming services bridge this gap for roughly 70-80% less. Only DirecTV has content and features that I deem worthy of a premium, but even their premium is too rich for my blood these days.

The cable companies and every network branching off into their own individual paid streaming service are just driving people back to piracy.
 

Joust

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Yea the home DVR boxes are a total ripoff in my opinion. They are NICE to have don't get me wrong. But the lack of expandability and the fact that you are forced to rent as opposed to buy your own... yea I'm out. I've cut that particular cord... dropped cable tv and the boxes went from 250 a month cable bill to 114. TYVM. Got Directvnow and am a happy camper.
I did the same thing, almost exactly.
 
D

Deleted member 93354

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This actually was the straw breaking my coax. I had Cox, basically, analog, coming from the street in to the TV with no box or other conversion. The TV did the 'decoding' as I didn't have any pay channels. When they mandated the box and required rental fee, I cancelled. It wasn't about the money, it was the principal. I refused to be held ransom over bullshit rental fees that could be easily solved by allowing us to purchase the hardware.
By law by federal mandate to switch that analog to digital they had to provide you a basic digital box with no fees for I think it was 6 years if they forced you to switch over. But it's too late since you already canceled.
 

Zarathustra[H]

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I refuse to use cable boxes or DVR's from my cable company on principle.

I have a custom MythTV build, a network based tuner and cable cards instead.

Of course, this has cost me WAY more than using the cable companies boxes, and resulted in not being able to view any channel with the "Copy Once" flag rather than the "Copy Freely" flag set. (in other words, no Fox, no HBO)

But such is the nature of standing on principle :p
 

nutzo

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By law by federal mandate to switch that analog to digital they had to provide you a basic digital box with no fees for I think it was 6 years if they forced you to switch over. But it's too late since you already canceled.
When COX switched to all digital, they offered me a free cable box. Told me it was free as long as I was a customer.
90 days later they started charging me for the box. I returned it and complained that I was lied to and threatened to cancel my service, so they removed the charge.
 

Brian_B

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Honestly,

I don't look at the individual line items on my bill. How they allocate all that money, sure it matters, but what really matters is the bottom line.

If the bottom line makes sense, I don't really care if they are billing me $1.99 for access and $84.57 for a cable box.

I realize they need to recoup costs and make some money. I'm not opposed to that. If nearly every service is $86.56 (that happens to be my Dish bill), and for me, in my area, they are... either they are all price fixing (which is illegal), or that's the price the market has settled on as fair for that particular service. If someone comes along and is able to provide similar services for less (I do not have "Broadband" - even by the loose FCC definition, so cord cutting is a difficult proposition), then I'm happy to change over.
 

vegeta535

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If i didn't buy my router for 100$, I would have paid 1400$ (that is not an exaggeration).. and would have to return it when I cancelled, even being obsolete equipment and all. I don't know how an analyst can say this is not a significant amount of money... Pure profit or money for nothing is never insignificant.
It is a scam. I switched to FiOS last year and they wanted to charge me $12.99 a month for the router. I went on eBay and bought the same one they listed for $40. Hell I could of gotten the older model for $15. It made sense in the 90s when I first got cable internet. Modems were $400 and died every other year. That was a steal for $8 a month. Now they are a lot cheaper and they raised the rental price. People just don't know better.
 
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PantherBlitz

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Equipment rental fees are the scammiest scam they are scamming. Verizon wants my old router back after I have already paid $250 for it or else they will charge me an additional $100.
 

Teenyman45

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Before I was able to ditch Comcast, they were charging something close to $20 for a DVR box and the privilege of recording. What was a real killer was that almost all the "HD" channels other than HBO and the big for broadcast networks were just 480p or even 480i broadcasts that were stretched and cropped to a widescreen format

We all should also know the box manufacturers cut costs by using cheap power supplies based on how much electricity these things consume even when the TV isn't on.

The other thing that really irked me was that Comcast kept trying to claim ownership of and force me to pay rent on a cable modem that I had bought from Amazon and had repeatedly shown the receipt, box, and shipping label for.
 

Shotglass01

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By law by federal mandate to switch that analog to digital they had to provide you a basic digital box with no fees for I think it was 6 years if they forced you to switch over. But it's too late since you already canceled.
I think I was offered 90 days or 6 months. I forgot, might have even been a year, but it was over when they basically said, 'we're going to bend you over even more for hardware!'

When COX switched to all digital, they offered me a free cable box. Told me it was free as long as I was a customer.
90 days later they started charging me for the box. I returned it and complained that I was lied to and threatened to cancel my service, so they removed the charge.
Yea, got to love their 'promotional' periods.
 

drescherjm

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Comcast started charging for the DTAs a few years back. I just returned one of mine since I don't need the $5.99 per month charge + tax.
 

sc5mu93

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I've been a Tivo user for over a decade now. The upfront cost is pretty startling, especially if you buy the lifetime service, but if you amortize it out, depending on the model you can pay it off in few years based on dvr cable box rental rates. and IMO Tivo is superior to almost all cable company provided dvrs that I have encountered.
 

nutzo

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We all should also know the box manufacturers cut costs by using cheap power supplies based on how much electricity these things consume even when the TV isn't on.
The other thing that really irked me was that Comcast kept trying to claim ownership of and force me to pay rent on a cable modem that I had bought from Amazon and had repeatedly shown the receipt, box, and shipping label for.
When I built my HTPC, I used low power components and an efficient power supply. Draws less then 50 watts when it's recording 4 shows and playing a HD movie.
When there's nothing to record it goes to sleep (drawing just a few watts) and automatically starts up before the next scheduled recording.
Electricity here in California is too expensive to waste.

When I started with COX, they charged $10/month for the cable modem rental. The cost to buy at that time was $695 (it was a long time ago) so renting made sense.
A few years later, cable modem where much more common, and I bought one for less than $100.
I'm now on my 3rd modem, but it's been over 20 years, so much cheaper to buy then rent.
 

horskh

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It is this kind of behavior which convinces me to remain pro net neutrality. I understand the other side of the argument, limit government meddling, but it is clear from their actions that these companies do not have our best interests at heart.
 
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It is this kind of behavior which convinces me to remain pro net neutrality. I understand the other side of the argument, limit government meddling, but it is clear from their actions that these companies do not have our best interests at heart.
NO Company has your best interests at heart. They have THEIR financial interests always coming first.
 

Zarathustra[H]

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It is a scam. I switched to FiOS last year and they wanted to charge me $12.99 a month for the router. I went on eBay and bought the same one they listed for $40. Hell I could of gotten the older model for $15. It made sense in the 90s when I first got cable internet. Modems were $400 and died every other year. That was a steal for $8 a month. Now they are a lot cheaper and they raised the rental price. People just don't know better.
Yep,

I just had them switch my ONT box over to ethernet mode rather than coax mode, and built myself a pfSense router. Much better than paying a ton of money for that included piece of Actiontec (or Westell) trash.
 
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I've always purchased my own modem, even back when I had DSL in the early 2000's and then when moving to cable after the DSL companies went out of business in my area.

Cancelled cable tv service about 2 years ago.

Cancelled Cox internet service a couple months ago.

Google fiber is sooooooooo much better. Not paying for their tv pkg, though. I'd rather pay for prime, hulu, netflix and watch the various free services (youtube, Pluto, etc). Anything else not available on those services can be acquired by other means. And with google fiber, you dont have to use their hardware. I dont need a modem, just connect my existing debian firewall (an UP^2 SBC) and I'm good to go. No non-user controlled hardware needed.

so cable companies, I see your cord cutting, and raise you a complete abandonment of your business. Google fiber speeds are what all industrially developed nations should have. Seeing actual downloads from actual websites average 50MB/sec is something that everyone should experience at home if they want. Cable can't deliver that under their current business model. Even if their customer service wasn't categorically the worst in the nation every year.
 

kju1

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Yep,

I just had them switch my ONT box over to ethernet mode rather than coax mode, and built myself a pfSense router. Much better than paying a ton of money for that included piece of Actiontec (or Westell) trash.
The problem is twofold: 1) Their policies are not consistent and so for me they refuse to switch the ethernet on. They tell me I will lose the TV service, which I dont use anyway. 2) Using a cablecard you cant get some content. I think their streaming crap is all proprietary

That being said I dont watch the tv anyway so if I could I would be on ethernet. And I really tried to get them to not send me the TV. I asked them to just charge me for it and not send the equipment. They wont do it. But if I pay for just internet the price is way more expensive...(see other thread)
 

kju1

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I've always purchased my own modem, even back when I had DSL in the early 2000's and then when moving to cable after the DSL companies went out of business in my area.

Cancelled cable tv service about 2 years ago.

Cancelled Cox internet service a couple months ago.

Google fiber is sooooooooo much better. Not paying for their tv pkg, though. I'd rather pay for prime, hulu, netflix and watch the various free services (youtube, Pluto, etc). Anything else not available on those services can be acquired by other means. And with google fiber, you dont have to use their hardware. I dont need a modem, just connect my existing debian firewall (an UP^2 SBC) and I'm good to go. No non-user controlled hardware needed.

so cable companies, I see your cord cutting, and raise you a complete abandonment of your business. Google fiber speeds are what all industrially developed nations should have. Seeing actual downloads from actual websites average 50MB/sec is something that everyone should experience at home if they want. Cable can't deliver that under their current business model. Even if their customer service wasn't categorically the worst in the nation every year.
Good for you but Google Fiber isnt an option for 99.9% of the country. They have abandoned plans to expand it. Fios is also not expanding I believe.
 
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Good for you but Google Fiber isnt an option for 99.9% of the country. They have abandoned plans to expand it. Fios is also not expanding I believe.
I wasn't suggesting that it was an option for everyone, or everyone would have cancelled their cable and moved to it already because it is better in every single conceivable way. Just that it's what _should_ be standard (except i think you should be able to unblock any default blocked ports if you call in and request it so you can run your own servers if you want).

I've been on cable internet for 15 or so years. It's passable for many things. Certainly able to handle cutting the cable tv cord and stream your content. At least for now. But it's such a pale immitation of what broadband internet access should be in this country and just another way that cable companies are screwing the public.
 

mlcarson

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Cable Card is the alternative to equipment fees. Many cable companies are adding DRM to make the cable cards useless in all but Tivo devices and WMC (windows 7/8) or are eliminating them entirely in favor of IP delivery but at least in my section of Comcast territory-- most everything is available via cable card. Purchase an HDHomerun Prime and you can create your own open DVR system. Or put up an antenna capable of getting the local network channels and use an HDHomerun Quattro tuner. Use HDHomerun Premium and additional IPTV services for anything else that you must have.
 

Zarathustra[H]

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The problem is twofold: 1) Their policies are not consistent and so for me they refuse to switch the ethernet on. They tell me I will lose the TV service, which I dont use anyway. 2) Using a cablecard you cant get some content. I think their streaming crap is all proprietary

That being said I dont watch the tv anyway so if I could I would be on ethernet. And I really tried to get them to not send me the TV. I asked them to just charge me for it and not send the equipment. They wont do it. But if I pay for just internet the price is way more expensive...(see other thread)
Huh. They never protested when I called them. In fact, for higher speed service tiers, (above 150Mbit/s, technically the limit is 175Mbit/s) they HAVE TO use the Ethernet port, as the coax MoCa standard can't keep up. When I first got 300Mbit service this became a requirement (I'm now on gigabit).

Yeah, if you do this without he special hardware from Verizon, you do lose connectivity to your set top boxes. They use the internet connection to pull guide data and stream "on demand" content.



In a stock old school coax only FiOS install it works like this:

ONT Box --coax--> FiOS Actiontec or Westell router

The router provides WiFi and Ethernet connectivity and also sends LAN traffic back out via the coax on a different MoCa channel that the set top boxes read.

With their newer ethernet based higher speed grades, they essentially do the same thing. Pass WAN traffic to the router via ethernet, but the router still needs to be installed where it has coax access so it can pass the LAN back out over coax, the same way the coax only install does.

Back in the day when I still used Verizon set top boxes but still wanted to use my own router, I had them set it to Ethernet mode, assuring them I knew hat I was doing, and connected an ethernet to MoCa adapter to one of the Ethernet ports on my switch, which I configured to the correct channel so that my set top boxes could grab IP's on the LAN. Worked perfectly.

I would call Verizon back ad ask for a higher tier support, insist that you know what they are doing, and have them switch you to Ethernet. They should do it. I've never heard of anyone being rejected before.

If they refuse, you could always use a Moca to Ethernet adapter on the WAN side if you want to use your own router, but the WAN side is a little trickier as it is encrypted. So you need to know the Moca Channel and the key, I believe. I did this way too long ago, so I can't remember the details, but I remember it was all out there on the dslreports.com forums.
 

kju1

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This is why greed is a literal sin. It's self serving and self defeating.
Only if you are religious.

Huh. They never protested when I called them. In fact, for higher speed service tiers, (above 150Mbit/s, technically the limit is 175Mbit/s) they HAVE TO use the Ethernet port, as the coax MoCa standard can't keep up. When I first got 300Mbit service this became a requirement (I'm now on gigabit).

Yeah, if you do this without he special hardware from Verizon, you do lose connectivity to your set top boxes. They use the internet connection to pull guide data and stream "on demand" content.



In a stock old school coax only FiOS install it works like this:

ONT Box --coax--> FiOS Actiontec or Westell router

The router provides WiFi and Ethernet connectivity and also sends LAN traffic back out via the coax on a different MoCa channel that the set top boxes read.

With their newer ethernet based higher speed grades, they essentially do the same thing. Pass WAN traffic to the router via ethernet, but the router still needs to be installed where it has coax access so it can pass the LAN back out over coax, the same way the coax only install does.

Back in the day when I still used Verizon set top boxes but still wanted to use my own router, I had them set it to Ethernet mode, assuring them I knew hat I was doing, and connected an ethernet to MoCa adapter to one of the Ethernet ports on my switch, which I configured to the correct channel so that my set top boxes could grab IP's on the LAN. Worked perfectly.

I would call Verizon back ad ask for a higher tier support, insist that you know what they are doing, and have them switch you to Ethernet. They should do it. I've never heard of anyone being rejected before.

If they refuse, you could always use a Moca to Ethernet adapter on the WAN side if you want to use your own router, but the WAN side is a little trickier as it is encrypted. So you need to know the Moca Channel and the key, I believe. I did this way too long ago, so I can't remember the details, but I remember it was all out there on the dslreports.com forums.
Well I went up a few levels and got tired of them hanging up on me. If I had another choice...but they know they hve me as long as I want internet service. I might try again now this was a few years ago so maybe their customer service has improved.

But either way I cant ge tout of paying for hte TV service. Because the cost of the internet goes WAY up with just the one service...so I pay less...and dont use one of the services.
 
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