Passing the CPE Buck

Members of the ISP-Wireless list discuss the elusive goal of making customers responsible for their own Customer Premises Equipment (CPE). Under the right circumstances, a lease can do the trick.

[September 12, 2001]

On the ISP-Wireless list in August, VP inquired,

"Does anybody lease their equipment to the end user so that the user becomes the responsible party?"

A number of respondents claimed it's impossible to pass the buck:

[SB recalled] "I spent weeks looking for this to no avail. There are plenty of good leasing companies, but they want you on the hook for the money."

[DT agreed] "If you guys find someone, please share!"

[JM added] "I've talked to a few different leasing companies, and as soon as I told them that this equipment would be at the customer's location, they pretty much just hung up on me. They want to know how you plan on recovering the gear upon default, who's going to cover repo costs, how does the product replacement process work upon device failure, and more."

Others noted that it's different, of course, if the end user is a business:

[JH offered] "You can lease to your clients, but it has to be a business client; banks will not lease to an individual."

[PH agreed] "Our financial partner does revolving lines of credit with ISPs, but not with their residential customers."

Still others suggested that it's possible, as long as you're willing to hold on to the liability:

[JM asked] "What if the business themselves takes a large lease from a company, say 20 complete CPE kits, then the business writes up their own individual equipment lease agreement for each of their customers to read and sign? Is this usually frowned upon by the leasing companies?"

[PH explained] "My understanding is that this is how our revolving line of credit works. Our financial division leases 20 or so CPE packages to an ISP, then the ISP sells their wireless service to the end user, absorbing the lease payment in the monthly service fee."

—End