Customer premises equipment (CPE)

 

Customer premises equipment (CPE) is telephone or other service provider equipment that is located on the customer's premises (physical location) rather than on the provider's premises or in between. Telephone handsets, cable TV set-top boxes, and Digital Subscriber Line routers are examples. Historically, this term referred to equipment placed at the customer's end of the telephone line and usually owned by the telephone company. Today, almost any end-user equipment can be called customer premise equipment and it can be owned by the customer or by the provider.

    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. 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.[1]

    With the gradual breakup of the Bell monopoly, starting with Hush-A-Phone v. United States [1956], 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 [voice and data] 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.