Time Warner Cable to raise modem rental fee

Business -

Time Warner Cable customers who rent a cable modem from the company will soon have to pay an extra $2 per month to do so.

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Source: www.flickr.com
Source: www.flickr.com

Beginning with customers' next billing cycle, Time Warner Cable will raise the price of its monthly cable modem fee from $3.95 per month to $5.99 per month, the company said July 29. Time Warner Cable cited "cost associated with providing the modem" as the reason for the price increase.

Time Warner Cable first introduced modem rental fees in October 2012. At the time, the cable company said that the high cost of replacing damaged or misplaced modems caused it to introduce the rental fee.

Time Warner Cable customers can avoid the rental fee altogether by buying an approved modem. Retailers like Amazon and Newegg sell qualifying modems, including the Motorola SB6141 (pictured here). Source: www.amazon.com

Time Warner Cable customers can avoid the rental fee altogether by buying an approved modem. Retailers like Amazon and Newegg sell qualifying modems, including the Motorola SB6141 (pictured here).

Time Warner lost around 190,000 cable TV subscribers in Q2 2013, the company said on Aug. 1. At the same time, the company added 21,000 high-speed broadband Internet subscribers -- less than half of what Wall Street analysts had expected, according to Reuters.

Time Warner said it was partially able to offset the loss in cable TV customers in Q2 2013 by increasing revenue per existing subscriber.

Time Warner Cable's commitment to raise per-user revenue comes as Google has expanded Google Fiber across several cities, including Austin, Texas. Google Fiber offers Internet speed significantly faster than cable companies typically offer, and for less money.

Time Warner Cable has created a new tier aimed at young people who might otherwise cut the cord that includes basic cable channels, 30 mbps broadband, and HBO (and HBO Go access) for $79.99 per month.

At least two recent surveys, released in August and September 2013, have suggested that the number of "cord cutters," or people dropping their pay TV subscription, is likely to increase as consumers supplement their video entertainment options with Internet-based services.

Time Warner Cable is set to appoint a new chief of mergers and acquisitions on Dec. 31 amid multiple reports suggesting that the company could be the target of a takeover bid from rivals like Comcast and Charter.

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