Comcast's Decision To Charge Roku Users A Bogus Fee Highlights Its Uncanny Ability To Shoot Innovation In The Foot

from the sabotaging-innovation dept

So when we last checked in with Comcast, the company was whining about a now deceased FCC plan to bring some much-needed openness and competition to your dusty old cable box. The FCC had proposed requiring that cable providers let users pick the cable box of their choice, later modifying the plan (after endless industry pearl-clutching) to simply requiring that cable providers bring their existing content in app form to existing streaming boxes. Granted, Comcast was at the heart of a massive, bizarre disinformation effort claiming the plan would end civilization as we know it.

Of course, what it would have ended was not only $21 billion in cable box monopoly rental fees, but a cornerstone of the closed, locked down walled garden that helps prop up the cable industry’s gatekeeper power. Comcast, for what it’s worth, claimed that bringing its content to third-party devices would harm copyright, increase piracy, hinder cable industry “innovation,” and was technically impossible anyway. Regardless, the FCC’s plan is dead, and it’s not coming back any time soon.

But Comcast still has to drive the impression that it’s listening to consumers and driving innovation, so the cable giant recently announced it would be bringing its Xfinity cable TV service to Roku streaming hardware. The app, currently in beta, lets users access their existing Comcast TV content without the need for a cable box, highlighting, Comcast insists, the company’s innovation in the TV space:

“Featuring an immersive guide with rich graphics, imagery, personalized recommendations and detailed information for tens of thousands of movies and TV shows, the app will allow Xfinity TV customers to watch live and on demand programming, including local broadcast and Public Educational and Governmental channels, as well as their cloud DVR recordings, delivered over Comcast?s secure private managed network, on Roku devices in the home.”

On its surface this sounded great. But this being Comcast, the company couldn’t allow itself to be innovative without saddling customers with entirely unnecessary fees. Reports quickly began to emerge that Comcast would be charging customers that use Roku in this fashion an additional $7.95 every month, for no coherent reason whatsoever:

“What makes this fee striking is that it’s not designed to pay for any particular cost to Comcast’s business. The $9.95 fee that 99 percent of cable customers pay for set-top boxes is listed on bills as an equipment “rental fee.” Even the Cablecard fee includes a bit of hardware from the cable operator. But the Roku app is purely software. It doesn’t require a piece of equipment supplied by the cable company, nor does it require a technician to come to your home to set it up.”

But Gigi Sohn, who served as a senior adviser to former FCC Chairman Tom Wheeler, said she knows why.

“It’s gravy to them,” Sohn said. “You’re already paying handsomely for the service. And now they’re making you pay a second time.”

It is, in effect, a $7.95 “because we can” fee, and a big reason the FCC wanted to standardize this process to keep cable executive “creativity” under control. Of course, this being Comcast, the company was also quick to make sure this service wouldn’t count against the completely unnecessary broadband usage caps it continues to deploy across the least competitive portions of the company’s footprint. Comcast’s FAQ on the new Roku beta correctly notes that this technically isn’t a net neutrality violation, because this traffic never actually touches the general internet:

The Xfinity TV service delivered through the Xfinity TV Beta app is not an Internet service and does not touch or use the Internet. Rather, it is a Title VI cable service delivered solely over Comcast’s private, managed cable network, so it will not count toward your Xfinity Internet Data Usage Plan.

So yeah, while not technically a violation of net neutrality (not that those rules will be around long anyway), it still gives Comcast a competitive advantage. If you’re trying to choose between a new streaming live TV service like Sony’s Playstation Vue or Dish’s Sling TV or Comcast’s offering, the fact that those services will erode your Comcast usage cap could very likely drive you back into the arms of Comcast. Of course, that’s quite by design, and is a perfect example of how every “innovation” Comcast pushes into the market tends to have a nasty underlayer of price gouging and anti-competitive shenanigans.

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Companies: comcast, roku

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Comments on “Comcast's Decision To Charge Roku Users A Bogus Fee Highlights Its Uncanny Ability To Shoot Innovation In The Foot”

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32 Comments
Baron von Robber says:

Comcast PR (Purely Ridiculous):”The absolutely, biggley, fantastic need for a Roku charge is that, you see, Roku packets are really, really big. They are so big, believe me. Our routers live in fear of Roku packets. They collide, jabber, you name it. [more Jedi like handwaving]. You just won’t believe how big and stuff Roku packets are. So with this fee [point up in a circle], you will see the sky open up and Roku packets will be great again!

Anonymous Coward says:

Re: Block competition

net neutrality not down the drain yet and many are fighting to stop them getting rid of it, and if they block services such as Netflix and Hulu there would be outrage

if you want to help protect NN you should support groups like ACLU and the Electronic Frontier Foundation and Free Press who are fighting to keep Net Neutrality.

https://www.aclu.org/

https://www.eff.org/

https://www.freepress.net/

also you can set them as your charity on https://smile.amazon.com/

also write to your House Representative and senators

http://www.house.gov/representatives/find/

https://www.senate.gov/general/contact_information/senators_cfm.cfm?OrderBy=state

and the FCC

https://www.fcc.gov/about/contact

ECA (profile) says:

Re: Re: Block competition

iTS INTERESTING, The Laws applied in most countries are SUPPOSED to be socially agreeable to most of the people..

A consensus..

There is supposed to be a LAW against False advertising..

I wont go into the PROGRAMMING the people with Superman, Truth, justice and the American way..

I dont even believe that 55% of the people Voted..

Anonymous Coward says:

Re: Re: Block competition

“… net neutrality not down the drain yet …”

Dreamer. Wake the fuck up. You are hosed! I wonder why so many of you insist on believing that country’s still worth living in. You’re mistaken. The rats have taken over. It’s too infested with cruft to suffer simple mortals to want to live or survive there.

The whole country’s in denial of reality. Nazi Germany was pikers compared to what the US’s produced lately.

I wasn’t expecting to see this in my lifetime. I’m not glad I did either. You’ve my sypathies, not that that’s any help to anyone.

kallethen says:

Ars Technica had some good coverage on this

https://arstechnica.com/information-technology/2017/02/comcast-will-charge-extra-fee-for-watching-tv-on-roku-boxes/

Ars had a good article on this earlier this month.

Relevant Comcast quote from an update to their article (emphasis added by me):

Comcast responded to us and confirmed that [b]Roku devices will be treated similarly to CableCard devices in terms of pricing[/b]. Customers who use a Roku as a "primary outlet" after the beta is over will get a $2.50 credit on their bill; the "primary outlet" isn’t an itemized fee but is included as part of paying for a TV subscription. Using a Roku as an "additional outlet" will cost $9.95, but the $2.50 credit will lower the price to $7.45. Xfinity TV app access on phones and tablets does not cost extra.

If I am reading that correctly, if you use the Roku app as your only outlet instead of a regular cable box, you won’t have the fee, but if you have a regular cable box and also use the Roku app, then you’ll have the fee.

jms (profile) says:

Re: Ars Technica had some good coverage on this

No, you have the fee either way.

If it’s your “primary outlet” it will cost you $7.45, but if it’s an “additional outlet” it will cost you $9.95. As your primary, you get $2.50 off the $9.95 fee.

The fee isn’t a separate item on the bill, just rolled into the overall cost, so it appears you’ll be getting a $2.50 credit on the bill.

Michael (profile) says:

Re: Re: Ars Technica had some good coverage on this

Is that what that statement means? I mean really, “we are charging this fee, but you can then get a discount of about 25% of that fee if you do something, but if you also do something else, we will charge you another fee”.

Doesn’t the FTC do anything about deceptive marketing anymore?

Whoever says:

Re: Re: Ars Technica had some good coverage on this

No. The primary outlet doesn’t incur a specific fee. It’s included in the cable subscription. However, if you use this, or a Tivo as your primary outlet as your primary outlet, you get a $2.50 credit.

To put it another way: Comcast charges $2.50 if you use their box for your primary outlet. If you use a Tivo or Roku (not possible yet), you don’t pay this $2.50.

You won’t be able to use this as your primary outlet until some indeterminate time in the future, so the reality is that it will cost $7.50 (as a secondary outlet).

Anonymous Coward says:

Nobody who currently uses a Roku as an alternative to cable will suddenly decide to subscribe to cable (again) now that they have a Roku app. Instead, this will encourage current subscribers to get a Roku as an alternative to their cable box so they can save on the rental fees.

Once these subscribers have a Roku and access to all of the “cord cutter” content providers many will probably give Netflix, Hulu, etc. a try. That’s an open invitation to cancel your cable subscription in favor of being able to watch what you want, when you want, how you want for a lot less money every month.

Someone at Comcast secretly works for Netflix I think.

Anonymous Coward says:

Re: Just some numbers here

Not on Comcast here either. My Shaw (Internet only; no TV) conn. started at $20/mo. (conn. fee waived, router fee waived, …), price guaranteed for six mo., after which it would double. Fair enough. $40/mo.; I can handle that.

After six mo., it tripled (ca. $66/mo.; Hollywood math?!?). Three years on, it’s $73/mo.

$39/mo. would be lovely. You’re gettin’ a good deal.

I see an ad on this page from Shaw advertising “High Speed Internet Sale – Internet 150 Just $49 + Free Install & Equipment” (GOK what “I… 150” really means (aka throttled?)).

ThatDevilTech (profile) says:

Like a broken record...

I know I say this probably every time I see an article like this, but Kodi FTW. I use a fork of Kodi/XBMC that allows me to watch anything at any time. From live sports to old sitcoms to the current episodes of the hottest shows. All for free. I only have to pay for the Internet. Which, sadly now our local cable provider has been doing the shitty caps for several months now. AT&T DSL and Uverse are “available”. DSL I know is, but the Uverse rep said we weren’t actually able to get it, even though the advertisement said it was available. But, our cable company provides faster speeds than either AT&T option.

Oh, and fuck Pai and his mission to kill net neutrality and competition. When will someone grow a pair, get away from the bribes and say ENOUGH??

ECA (profile) says:

Re: Like a broken record...

Dont you love it??
And SOON with the cancellations, they will RAISE the internet prices because they know what we are doing..

Ever notice that FAMILY internet, is absent? Do they REALLY think that 400-500gig, Shared with 7 devices is ENOUGH??
From Desk computer, Phones(yes we are dropping the CELL PART), Tablets, Roku, Chromecast, and TONS of other devices..

ConsumersNeedToShowSomeSpine says:

Still don't use Comcast

Opinion

I had comcast years ago, dropped them for various reasons primarily their rate hikes every few months.

If consumers had a spine and together in a region just cancelled their comcast accounts (if they could actually cancel (http://gizmodo.com/its-completely-absurd-how-hard-it-is-to-cancel-comcast-1605040001, http://www.slate.com/blogs/moneybox/2014/07/15/comcast_rep_refuses_to_cancel_service_listen_to_the_customer_service_call.html), soon they would change their behavior, but that’s the thing… which company could they go to in a captive market that isn’t using the same “collusive” application of revenue generation?

Anonymous Coward says:

Not new

"What makes this fee striking is that it’s not designed to pay for any particular cost to Comcast’s business. …. But the Roku app is purely software. It doesn’t require a piece of equipment supplied by the cable company, nor does it require a technician to come to your home to set it up."

Back in the 80’s my cable company wanted an "outlet fee" for each TV hookup. I don’t know whether they’d provide a splitter or technician or anything, because I never heard of anyone paying it—everyone would buy a $10 splitter and run some coax. But the company would occasionally "remind" people about this, that everyone should be honest and not "steal" service.

Digital cable fixed all that for them of course. Now, TVs just don’t work without a cable box.

Anonymous Coward says:

Re: Re: Not new

“”Back in the 80’s my cable company wanted an “outlet fee” for each TV hookup.”

“The 1992 Cable Act ended that.””

ITYM, “It took an Act Of Congress to stop them from pulling such !@#$.” CableCo’s data had been paid for and delivered. How that was dealt with, or split out by the customer was their (the end user’s) concern. Billing that end user on how they handled their bought and paid for data should never have been on the table.

Pretty corrupt system. It’s astonishing complaints such as this still go on in this century.

Not to mention, that such like Pai defend those who support such arguments. I hoped such things as the Magna Carta, centuries ago, would’ve presaged the end of this right of kings bs. Apparently, such a presumption was premature. We’ve still a few more kings to beat into line/submission. Sadly, they now have lawyers, lobbyists, and bought law on their side to defend their delusions and rapacity.

Sucks to be a peon/peasant in any century, it seems. When will this crap ever end?

The Wanderer (profile) says:

Qualifications for being a violation

Comcast’s FAQ on the new Roku beta correctly notes that this technically isn’t a net neutrality violation, because this traffic never actually touches the general internet:

The Xfinity TV service delivered through the Xfinity TV Beta app is not an Internet service and does not touch or use the Internet. Rather, it is a Title VI cable service delivered solely over Comcast’s private, managed cable network, so it will not count toward your Xfinity Internet Data Usage Plan.

Is the bandwidth available over your Internet connection while using this service the same as the bandwidth available over that connection while the service is not active?

If so, then yes, I would agree that this is not a net-neutrality violation.

If, however, they’re using (a differently labeled segment of) the same pipes – such that this service consumes resources which would otherwise be available for use with other services – then it’s still just as much a violation as any other form of zero-rating.

(If the cable company permanently segregates off a chunk of the cable bandwith for its TV services, and never uses that bandwidth for Internet service – not even for people who don’t receive TV service at all – then using that bandwidth for this service wouldn’t reduce the available bandwidth for the Internet service, and so would not be a (new) violation. It would also mean less Internet bandwidth than would otherwise be available, however, so I wouldn’t be surprised if cable companies don’t do this.)

Anonymous Coward says:

Yaknow, ...

“… $21 billion in cable box monopoly rental fees …”

WTFMG!?!?!

Twenty one billion US dollars would be one seriously big load of cash for damned near any commercial op anywhere (or this 20th Century kid would believe). Perhaps I’m an old fogey who doesn’t understand economics and inflation; dunno.

This’s about a $21,000,000,000 *sideline* on top of their core business? Crazy and nuts can’t even begin to describe how ludicrous this is. This is legal in this century you say? We’re all in the wrong line of work, is all I can say. What a FUCK of a racket they stumbled into!

Woof! Wasn’t NASA’s entire budget something like that when we were trying to put people on the moon?

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