The Business Council of New York State, the State’s leading statewide business and industry association, opposes this legislation that would amend the Public Service Law to establish a cap that limits the amount a consumer may be charged for leasing a modem, remote or other device from a cable or internet provider.
If enacted, this legislation would mandate significant limits on New York State’s cable and internet providers and the customers they serve. Specifically, this bill would require that cable and internet providers shall not “charge any subscriber an amount which is more than the actual cost of the modem, remote control or any other device paid for by the company.” In essence, companies would have to supply modems, remotes, and other equipment to customers less than, or equal to, the actual cost of the modem. Additionally, this proposal also prohibits providers from charging any maintenance and monthly lease fees associated with the device beyond one year. Violators of this new law could be subject to fines of $500 in each instance.
It should be noted that customers already have the option to purchase their own modem, often from third party retailers, thus forgoing a lease from their provider. These consumers are free to research the pros and cons of each option, and then determine which is best for them individually. Imposing this cap may actually increase consumer costs if cable and internet companies cease providing this equipment due to this legislation. This change in paradigm could narrow the market thus leading to higher costs from third party provider – the only remaining option if companies left this part of the business.
With a move from cable and internet providers from modem and equipment installation and maintenance, the burden of installing, maintaining and replacing this equipment will ultimately fall to each individual consumer. Since many consumers have decided to opt for the convenience of leasing a modem that is installed and maintained by their provider, they avoid unplanned, unknown, and sudden costs associated with modems and equipment purchased from third party providers. This scenario would likely change if this bill were to become law.
Lastly, this bill does not take into account all of the costs associated with modems, remote controls, and other equipment that is necessary for service. Providers must manage a vast universe of associated costs relating to equipment: shipping, handling, stocking, repairs, replacements, technical services, as well as the various costs in technical support centers to provide customer service. Thus, consumers thinking this bill would help reduce costs, would likely run into unforeseen costs once they experienced any issues related to the third-party purchased equipment.
For these reasons, we respectfully urge the defeat of this bill.