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United States Businesses Communications Entertainment

How Much Does a Cable Box Really Cost? The Industry Would Prefer You Don't Ask (latimes.com) 219

Posted by msmash from the fact-check dept.
The FCC chairman insists that he is driven by a market-based approach to regulation. In a story, published Tuesday, an LA Times columnist uses the simple example of set-top boxes to argue the agency has, instead, been captured by the industry it regulates. From the story: Spectrum TV and internet customers will see their rates go up again in November. Among other increases, the broadcast TV surcharge will rise to $9.95 from $8.85 a month, and the monthly fee for a set-top box will jump to $7.50 from $6.99. It was that last charge that got my attention -- and got me thinking about the economics involved. How much do cable boxes actually cost? Why do their monthly fees keep going up when the cost of similar technology, such as TVs and computers, goes down over time? Not surprisingly, my attempts to answer these questions were met with stonewalling from industry players.

Spectrum, owned by Charter Communications, the dominant pay-TV company in Southern California, clammed up real fast when I asked how much they pay for the boxes they lease to subscribers. Nor would it comment on how much cash flow the boxes generate, or why fees keep rising even as the number of residential TV subscribers dwindles (down 66,000 more in the third quarter). Dennis Johnson, a company spokesman, said only that the 7.3% higher box charge in November -- more than three times the inflation rate -- represents a "modest increase" that is "comparable or even lower than our major competitors."
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How Much Does a Cable Box Really Cost? The Industry Would Prefer You Don't Ask More

How Much Does a Cable Box Really Cost? The Industry Would Prefer You Don't Ask

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  • This is why cord-cutting has become common (Score:5, Insightful)

    by SuperKendall ( 25149 ) on Tuesday October 30, 2018 @04:24PM (#57564395)

    That was one reason I stopped using Cable TV services, I could not take the recurring cost of a cheap ill-made box with a terrible UI.

    I would way rather spend more one time on my own box, as I do with cable modems - at least then I haves some control over quality and will not be paying a huge amount over the lifetime of use.

    I have to think that a lot of people do not like TV services gated through a crappy cable company box and that is doing a lot to increase the number of people unsubscribing from cable TV content.

    • Re: (Score:2, Insightful)

      by Anonymous Coward

      I too used to do that. But now I would barely break even on the price of the modem by the time my service got upgraded and I needed a new modem. So I could keep buying new modems every 4-5 years, and have to worry about replacing it out of pocket if it ever craps out, or I can get one from the ISP and let them worry about replacing it if it craps out and they'll give me a new modem if I get upgraded service that the older modem cant handle.

      My current ISP also doesnt charge for modem rental, so theres that t

      • Re: This is why cord-cutting has become common (Score:2, Insightful)

        by Anonymous Coward

        That's a big thing. Out here they charge $10 a month for the box, when a quality modem is $90. They use bundled modem + router boxes, and the routers are awful, they're missing standard features, they can't cope with more than one Xbox running at once, for instance.

        Luckily we've got fiber now, and despite having specialty hardware and no competition they don't pull these games with "rental fees" and shit.

        • I used to do keep the ISP supplied router in its box and use my own until I upgraded to gigabit fibre. The supplied router for that was a halfway decent fritzbox. They're kind of forced to supply something good with those speeds, as the crappy routers can't keep up with the packet rate. Now the ubiquity router sits in a box.

      • > But now I would barely break even on the price of the modem by the time my service got upgraded and I needed a new modem.
        > So I could keep buying new modems every 4-5 years,

        Huh??

        DOCSIS 3.0 was released August 2006. I'm not sure when cable companies allowed customers to use their own cable modem but its been at least 5 years.

        A basic DOCSIS 3.0 modem was like $70 a few years back. Your cable company charges you a rental fee of ~ $10/month so buying your own cable modem would pay for itself within a

    • I would way rather spend more one time on my own box, as I do with cable modems - at least then I haves some control over quality and will not be paying a huge amount over the lifetime of use.

      On the other hand, if you have your own STB it will likely not have the STB functions like On Demand or whatever your cable company calls it, and if it breaks you cannot just walk into a local office and get a new one free. You probably also don't have a lot of control over the UI.

      I have my own -- SiliconDust Home Run Pro I think it is. An 'm' style cableCard to get three channels at once. But if it breaks I will have to buy another one. And the SD UI really sucks.

      I have to think that a lot of people do not like TV services gated through a crappy cable company box and that is doing a lot to increase the number of people unsubscribing from cable TV content.

      The box is probably pretty low on the list

      • I have my own -- SiliconDust Home Run Pro I think it is. An 'm' style cableCard to get three channels at once. But if it breaks I will have to buy another one.

        For several years, I was using a MythTV system I built that could record 3 channels, but it only had SD tuner cards -- which was fine for me. Cox switched to digital only and I thought about updating my system to use a SiliconDust unit and CableCard, but Cox has a spotty record in several ares of the country of randomly enabling the CC bits [wikipedia.org] and I didn't want to mess with it. I ended up buying a 1TB TiVo BOLT w/4 tuners and am pretty happy with it. A friend has a Roamio w/6 tuners and 2 Mini Tivo units and

        • How do you deal with the PITA that is switched digital video? There is some bug between the Tivo, the cable card, and the SDV box that results in a "all timers are in use error". We end up having to reboot the sdv box and/or the TiVo to get everything working again.
          • I've never had that problem in the 2 years I've had the Bolt, but the SDV box (connected via USB) did disconnect/reconnect (according to the TiVo box) once.
          • I still run my Windows Media Center with a cable card and a quad tuner Ceton but that POS SDV adapter has been a real pain since day 1. But as long as it keeps working I'll keep using it as really like the UI/Guide on WMC and will be super sorry to see it go when it does.

      • Re: (Score:2)

        by AmiMoJo ( 196126 )

        My TV has on-demand features like BBC iPlayer and ITV Player.

        I only got the cable STB because it was 20 quid a year more than broadband on its own. I guess they are hoping that I spend more money on pay-per-view or something.

        The box is total crap, I can't believe how bad it is. It's actually slower than the last one I had over a decade ago. Takes 10 minutes to start up (no exaggeration) and the menus are slow and unresponsive. The TV guide in particular lags like hell. The cheap LG TV I have it connected to

    • Re: (Score:2)

      by imidan ( 559239 )
      Talk about a terrible UI... I have family I visit now and then who have Xfinity. Their service is so flaky that they have to reboot their cable box pretty frequently by unplugging it and plugging it back in. It takes something like 3-5 minutes to boot up. What on Earth is going on in there? Once it's booted, any interaction with the UI, including simply changing channels, takes multiple seconds to execute. Why are people willing to put up with this level of input latency just to watch TV? How can whoever de

      • Re:This is why cord-cutting has become common (Score:4, Informative)

        by michael_cain ( 66650 ) on Tuesday October 30, 2018 @08:23PM (#57565609) Journal
        A bunch of that time the box is waiting for the downstream feed with channel lineup and content to arrive. It's a legacy national feed, tied down by a bunch of ancient business contracts, so your box waits while Cleveland and Boston and Salt Lake City's lineups go by.

        A channel change means frequency change for the analog tuner, dynamic gain adjustment, sync to the MPEG transport stream, sync up the decryption hardware, start extracting the particular content stream, wait for a B frame to come along, and finally start putting up the image. All spec'ed out by the standards bodies 25 years ago.

        Change it? It took more than a decade of lobbying to get the FCC to approve dropping analog NTSC carriage.

  • We all know the truth (Score:5, Insightful)

    by bobbied ( 2522392 ) on Tuesday October 30, 2018 @04:25PM (#57564399)

    They are making scads of cash on these things and the price goes up because they need more and more revenue because the cord cutters are killing the top line.

    Personally, I use only a cable card, which runs $4/month and get up to 3 channels of TV at a time. Still this is highway robbery, Cable Cards only cost a few hundred dollars and I know they have a pile of them just sitting there and they charge enough just for service to more than pay for this.

  • Comparables (Score:5, Informative)

    by Mr D from 63 ( 3395377 ) on Tuesday October 30, 2018 @04:25PM (#57564405)
    There is nothing complicated about a cable box. Comparable electronics with a tuner and an HDD for DVR storage would likely run in the $35 to $55 range wholesale. Maybe lower.
    • ^I should have said manufacture cost, not wholesale.

      • ^I should have said manufacture cost, not wholesale.

        Yep, which makes the wholesale cost about double that $70... Then the cable company adds to that, custom and licensed software which adds another $70 per unit so you are at $140 per unit. Add custom branding to the equipment, packing materials, user manuals, throw in a remote control and some cables and you can be wholesale $200 easy.. Which, you double to retail. So $400 is a fair retail price. Add profit to that and we are at $600, which seems to be the sweet spot for what they charge for these things

        • My God, man, where do you live? Move away from there! My parents were "offered" the chance to buy a refurbished box outright for about $80 or continue to pay monthly rental fees which, by the way, were increasing soon. This, from Verizon directly. The math was simple and swapping the boxes took little time. $600 for a cable box? smh

          • Re: Comparables (Score:2, Informative)

            by Anonymous Coward

            I used to work for a cable company, a large one. The cost of the boxes varies by features and manufacturer and how many the company purchases in a batch. But roughly speaking:
            A basic single tuner Adaptor with limited output ports is around $40. A full blown set top box with two tuners and multiple outputs (i.e. hdmi, component, a dedicated audio, etc.) is closer to $100 . A DVR can be anywhere from $150 up to $400 depending on if it has 3 or 4 tuners, and the size of the internal HDDs.

            But that's only part o

        • Re: (Score:2)

          by Cederic ( 9623 )

          Or you can buy a kodi box for $40 which does fundamentally the same things.

          So $40-80 retail feels a sensible price - or about 10 months rental. Yep, it's a rip-off.

  • Once a design is approved for manufacture and at the volumes they order, a cable box would cost them pennies. Then someone has to write (re-write) the firmware, and someone has to take that thru any updates (hah!). But the volume still swamps all the other costs.
  • I mean that is what a Raspberry Pi package is going on Amazon.
    The cable boxes can't be that powerful for as slow as they are.
    Need some extra ports thou.

  • Market-based Approach (Score:5, Funny)

    by PPH ( 736903 ) on Tuesday October 30, 2018 @04:28PM (#57564419)

    So, what's the going price for an FCC chairman?

    • Re: (Score:2, Funny)

      by fahrbot-bot ( 874524 )

      So, what's the going price for an FCC chairman?

      About $3.50 [knowyourmeme.com] ...

    • How much do cable boxes actually cost? Why do their monthly fees keep going up when the cost of similar technology, such as TVs and computers, goes down over time? Not surprisingly, my attempts to answer these questions were met with stonewalling from industry players. Spectrum... clammed up real fast when I asked how much they pay for the boxes they lease to subscribers.

      Also think about this: the cost of computing devices (and clothing, and food) has been consuming a smaller and smaller fraction of the average family's income as the years go by.

      But the one expenditure that bucks this trend is the cost of government. It has consumed a larger and larger fraction of the average family's income.

      Since government uses technology to provide services, one would think falling IT costs would in turn reduce the cost of government.

      Advocates of big government clam up real fast when I

      • The cost of government is irrelevant. It's what you get.

        If you get free health, free mental health, cheap fast mass transit, prisons that don't create criminals, free education and a police force that tackles crime rather than causes it, it's worth more than a government that does none of the above.

        Cheap government advocates shut up when I point this out.

  • Right in the first sentence of the summary (Score:3, Informative)

    by Anonymous Coward on Tuesday October 30, 2018 @04:29PM (#57564425)

    The FCC chairman insists that he is driven by a market-based approach to regulation.

    Oh, he is driven by a market-based approach. Whatever the market will bear that allows more money to be funneled directly to his and his crony's pockets is what he'll let slide. If he were smart enough to realize that there's a tipping point as you up the ante where people will stop paying in, he might have a different outlook, but he's a typical politician/businessman and sees the next quarter only. And he can only calculate the next quarter by taking the direct results of the previous quarter and multiplying them by whatever increased price has been decided on. Nobody ever thinks about the potential for the market to shrink, despite countless years of evidence that this market is, in fact, shrinking.

  • Comcast won't give a static IP without their modem (Score:5, Informative)

    by t0qer ( 230538 ) on Tuesday October 30, 2018 @04:37PM (#57564463) Homepage Journal

    Had this issue pop up recently.

    A few years back customer opens shop. After 3 shitty comcrap modems, we buy our own. Comcast at the time has no issue, we have a static IP set and it's set for 3 years. FF to last week. Customer can't connect via VPN, lotta other people depending on that static IP can't connect. I call comcast and they start troubleshooting.

    Apparently they changed their policy. No static IP if the customer is using their own modem. Nope, we can't have our old IP back, big FU. We have to pay $19.95@mo + $10 modem lease to get a static from them now. Never mind that this is a bonafide business account. Cable companies are worse than lawyers and politicians, and that's a pretty low bar as is.

    • Re:Comcast won't give a static IP without their mo (Score:5, Informative)

      by omnichad ( 1198475 ) on Tuesday October 30, 2018 @04:47PM (#57564505) Homepage

      Charter (Spectrum) is worse. No static IP without a business account. No customer-owned modems allowed for business accounts at all. They claim it's to "maintain the quality of their business network" as if they're using different channels or nodes for business customers.

      • Re: (Score:3)

        by t0qer ( 230538 )

        Ya same thing with comcast/xfinity. Just another way to milk us. I wish when municipalities allow these jokers to use our poles that they'd have the foresight to think about this kind of situation. It'd be like AOL saying you can't use any HAYES compatible on their dial up. Absolutely no reason for this.

        • It'd be like AOL saying you can't use any HAYES compatible on their dial up.

          It wasn't until 1968 [wikipedia.org] that AT&T allowed you to use any modem/phone/device but theirs on the telephone network.

      • so that every ISP exists in a quantum state of crapiness that can be described as "Craptacular" or "Comcastic".

      • Re:Comcast won't give a static IP without their mo (Score:5, Interesting)

        by grep -v '.*' * ( 780312 ) on Tuesday October 30, 2018 @07:42PM (#57565475)

        . No customer-owned modems allowed for business accounts at all. They claim it's to "maintain the quality of their business network"

        I've got Comcast Business, with a force-rented modem. I understand that it's actually for support -- if you call with a problem as a business customer, you want it fixed. And they don't want to futz with yet ANOTHER modem, and what's it's password, and what do you mean you don't know?

        Besides, if you're a "business customer" then that's just another ongoing cost of doing business, no big. This way they know *everything* up past the demarc to your edge of the network and they know EXACTLY what to expect once they get there.

        They also give you (most of) the controls for it as well, so you can make reasonable changes. One of the techs was surprised that I had changed from their default /24 network. Not that it bothered him at all, but apparently no one else bothers to do so.

        • Re: (Score:2, Interesting)

          by Anonymous Coward

          Actually, they know all the client devices connected as well.

          I was experiencing an outage a few weeks ago. My systems are really stable, so I assumed it was Comcast's fault. I rebooted their router/modem, that didn't fix it. I called in and had them reset it remotely through the automatic system. No joy.

          Called back and spoke with someone who could actually help. For once I wasn't an asshole and asked for help nicely. Learned long ago that about 10% of the time, I'm wrong, so best to be nice. She connecte

        • Comcast allows you a modem. In Charter territory, the forced modem is a modem/router. This is where the problem comes in, honestly.

    • I avoid Comcast like the plague. Cut the cord years ago. Even back then there was a line of people returning equipment. Lucky for me I have an internet provider alternative. Comcast business model is based on raising prices without offering anything new. Their expertise is in inventing new fees or claiming taxes have doubled or even tripled month to month and calling customers cheap - "it's less than a $1, what's the big deal?". My cable bill always increased between $0.10 to $1.99 per month every month (us

    • you dont need a static ip anyways. just setup a name server. when you ip changes the server will see that and point to the new ip.
  • but reading their SEC filings was a great way to tell how much TV & Internet really cost them. Last I check (which to be fair is probably going on 6 years ago) my $78/mo internet was $9/mo. In the interest of maintaining that sense of fairness I'm now paying $99/mo for the same service.

    Anyway, anyone done it more recently? I doubt it's changed much.
  • These monthly rentals are such a scam - and a cha-ching for the cable companies. When we installed voip TWC (Now Spectrum) provided an upgraded cable modem to replace the old Motorola we'd been using for years. I don't know what happened to the Motorola Cable Modem (which was rented from TWC) but I assumed the technician took it with him. A couple of years later we have to move, and TWC claims we owe them $125 for the cable modem we never returned. They are billing us $125 for something that costed arou

  • but somehow i fail to see cable boxes mentioned in this text:
    "Unfortunately, our website is currently unavailable in most European countries. We are engaged on the issue and committed to looking at options that support our full range of digital offerings to the EU market. We continue to identify technical compliance solutions that will provide all readers with our award-winning journalism."

    maybe get rid of all the parts of your website that is in conflict with the GPDR?

    • for anyone else hit by the same "here be dragons" wall:
      https://web.archive.org/web/20... [archive.org]

    • For a lot of especially smaller publishers, the hardest part of General Data Protection Regulation (GDPR) to comply with is article 27, which states that if you provide goods or services to the EU and you don't have a physical presence in the EU, you have to hire a firm with a physical presence in the EU to act as your representative. This representative service can run thousands of dollars per year for even the smallest sites (source [verasafe.com]) and smacks of protectionism. The only surefire way to avoid obligation u

      • Re: (Score:2)

        by Bert64 ( 520050 )

        If you don't have a presence in the EU then you don't have to comply with any EU laws at all. The fact that your website *can* be reached from the EU, or that someone in the EU could have your products sent to them is irrelevant.

        There are hundreds of countries all around the world, some of them have very strict laws on various things, and yet the internet is full of websites which while perfectly legal in some countries are entirely illegal in others. Porn is one such example, porn is illegal in many middle

        • Re: (Score:2)

          by tepples ( 727027 )

          If you don't have a presence in the EU then you don't have to comply with any EU laws at all.

          Then you can't take money from customers in the EU or from advertisers in the EU. See "Extraterritorial Scope of GDPR: Do Businesses Outside the EU Need to Comply?" by Imran Ahmad [businesslawtoday.org].

          • The article you pointed to doesn't explain why I (running a Canadian website) should care in the least about what the EU says.

            GP's point is still valid. If you don't have a presence in the EU, there is absolutely no reason to think their rules apply, no matter what the EU says.

            EU: "Uh huh!"
            Me: "Nuh uh!"

            Result: I win.

            • Re: (Score:2)

              by tepples ( 727027 )

              How is your Canadian website funded? If through subscription or a la carte payment, you are dealing with payment card issuing banks in the EU. If through advertising, you are dealing with ad exchanges that more than likely target EU users. If otherwise, please explain so I can describe how EU jurisdiction affects it.

  • How much do typewriters cost?

    It's not the 1990s anymore.

    • Re: (Score:2)

      by mentil ( 1748130 )

      Typewriters probably cost more now than they did in the (early) 1990s, when some secretaries still used them, since they sell at such a low volume now.

  • 2018:
    Still needing a cable box for any reason whatsoever

    ISHYGDDT.

  • While these boxes are getting more and more expensive ( built in cable modems/wifi/moca/UI ie.. all licensed from other companies not actual hardware cost) the majority of the cost of the boxes are the fact that they have to replaced frequently. A not so small part of the people who have these boxes do not treat them with care, they put them in small enclosures with no airflow or they spill things on them or leave in locations where their animals can get to them. They are also often just lost outright

  • This is a good workaround to using rented devices.

  • Comment removed (Score:3)

    by account_deleted ( 4530225 ) on Tuesday October 30, 2018 @05:43PM (#57564893)
    Comment removed based on user account deletion

    • You made me laugh, but it's oh so true. I recently moved, and in the back of a giant storage box I found a ratty old vinyl gym bag. It was oddly familiar, but I couldn't for the life of me remember what was in it or when I had last seen it.

      It was the cable and ethernet card bag! Lots of cables and lots of 10/100 cards, many of them labeled, "probably bad".

      A holdover from my LAN party days of the early 2000s. That bag was the equivalent of a doctor's bag. Medicine to make the PCs go.

  • Internet + Netflix + Mohu antenna for local channels over-the-air gives you all of the TV you can possibly watch. Who needs a "cable box?"

    • Re: (Score:2)

      by tepples ( 727027 )

      Somebody who wants to legally watch live political talk shows on MSNBC and/or sporting events involving specific teams. These tend to be exclusive to "Sign in with your participating pay TV provider".

  • In order to have a market-based approach, there first needs to be a market. In order for there to be a market, there first needs to be competition. Without competition, all you'll ever have is a "take it or leave it" transaction, with the seller in control of the price.

  • in canada you can buy the box without outlet fees

  • Just cut the . . .satellite. . . or cord (Score:5, Insightful)

    by bob4u2c ( 73467 ) on Tuesday October 30, 2018 @06:22PM (#57565063)
    I just canceled my account with DirectTv

    I had a HD Tivo branded box, which about 5 years ago would have cost me about $300 (I can now buy one for $200). However, owning the device wouldn't stop their monthly tax of $15 ($10 for the DVR, $5 for Tivo service). On August 2nd they merged my account with AT&T's RC1 system and turned off the DVR and Tivo capabilities (all prior recorded content was also no longer watchable). After calling them about 7 times they told me their was nothing they could do and to stop calling.

    So I did.

    Instead I spent my time looking at streaming services, what we watched as a family, and what the costs were. I also ended up canceling my DSL with AT&T as well (they couldn't offer me speeds fast enough to stream tv).

    My final solution was to go with Comcast for internet which is about $30 a month (40x faster than DSL for about 75% the cost). I bought a new modem for $75 shipped which supports downloads 10x faster than my current package (still way cheaper than paying their $11 rental fee on a modem). I already had a good wireless router and a 10GB switch which all worked with the modem.
    I went with Sling for typical tv channels we watched at about $35 a month ($25 for the package, + $5 for kids channels, + $5 for DVR). I also bought a $90 Roku box (Roku 4, wired ethernet, 4K output, bluetooth remote).

    So the breakdown of costs:
    DirectTv + DSL ~ $132 per month.
    Sling + Comcast ~ $65 per month (plus $165 one time equipment cost).

    So in 2 1/2 months I will be in the black. I also now have way faster internet; and with streaming I can watch what I want when I want it. Roku also has a ton of old free shows and movies which I'm still binging on. I now no longer have any rental fee and I can cancel anytime I want with no penalty fees.

    Still the best bit was calling DirectTv and canceling the whole thing. Then asking to be transfered to the DSL department so I could cancel that too.

  • the 7.3% higher box charge in November -- more than three times the inflation rate -- represents a "modest increase" that is "comparable or even lower than our major competitors."

    My Netflix "cable box" came built-in to my TV, and my Blu-ray player. And my computer. And my phone. I did buy a $59 (or $5/mo for a year) Roku for the TV that doesn't have it built-in.

    It's the cost of cable that drove me away in the first place -- at one point I was paying over $100 for basic cable, 2 cable boxes, plus a couple premium channels. Now I pay $9.99/mo for Netflix and receive free over-the-air TV with an antenna. Still haven't gotten away form the cable company though, now they get $59/month f

  • the broadcast TV surcharge will rise to $9.95 from $8.85 a month

    This the single dumbest thing, and is proof positive that the industry 'regulators' do no such thing. Having a 'broadcast TV surcharge' for cable... who's entire purpose is to broadcast TV over their cables... is like having a 'flour surcharge' at a cake store. It's just another way for cable companies to advertise $29.99/mo... but it's only for 12 months... plus fees... plus taxes... plus surcharges... plus cable box rental. So after the 12th month, it's actually double or maybe triple the cost they adv

  • Add up the retail cost of the components. The real cost will be 1% of this.

    Let's look at this logically, though. Designing the board costs a lot more than etching it. You don't need gigabytes of RAM. You don't need expansion slots. These are the expensive components in a computer and they're all missing.

    Even if we assume embedded costs $300 retail and 50% markup per layer of sales, you're looking at $75 for a set-top box.

  • I've been in the set-top box business for more than 25yrs and can tell you, they are ripping you off way more than you know. The cost of at pay-TV box, similar to a DirectTV or cable box, is roughly $12 FOB China. The cost of a free to air ATSC or DVB-T box is roughly $7.50.

    • The cost of a Roku or Android box is roughly $25-30, depending on the amount of RAM and 4K support or not.

  • The standard cable box UI hasn't changed since the 1990's, despite occasional changes to the hardware. The hardware is of course woefully outdated as well, effectively unchanged since the advent of HDTV and DVRs.

    The only other hardware I can think of that stayed at the same price point for so long without any value-adding hardware or software changes are TI graphing calculators.

    That's what monopoly power does to a market.

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