Customer-premises Equipment - History

History

The two phrases, "customer-premises equipment" and "customer-provided equipment", reflect the history of this equipment.

Under the Bell System monopoly in the United States (post Communications Act of 1934), the Bell System owned the phones, and one could not attach one's own devices to the network, or even attach anything to the phones (a popular saying was "Ma Bell has you by the calls"). Thus phones were property of the Bell System, located on customers' premises – hence, customer-premises equipment. In the U.S. Federal Communications Commission (FCC) proceeding the Second Computer Inquiry, the FCC ruled that telecommunications carriers could no longer bundle CPE with telecommunications service, uncoupling the market power of the telecommunications service monopoly from the CPE market, and creating a competitive CPE market.

With the gradual breakup of the Bell monopoly, starting with Hush-A-Phone v. United States, which allowed some non-Bell owned equipment to be connected to the network (a process called interconnection), equipment on customers' premises became increasingly owned by customers, not the telco. Indeed, one eventually became able to purchase one's own phone – hence, customer-provided equipment.

In the Pay TV industry many operators and service providers offer subscribers a set-top box with which to receive video services, in return for a monthly fee. As offerings have evolved to include multiple services operators have increasingly given consumers the opportunity to rent additional devices like access modems, internet gateways and video extenders that enable them to access multiple services, and distribute them to a range of Consumer Electronics devices around the home.