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.

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community. Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis. While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: fees, innovation, set top boxes, tv

Companies: comcast, roku