Public Service Dept. eyes Comcast changes (Rutland Herald)

By Bruce Edwards

Channel changes made by Comcast have drawn the attention of the state Department of Public Service and the ire of U.S. Sen. Bernard Sanders, I-Vt.

Comcast last week moved six channels from its standard cable analog package to its 72-channel digital service. The switch also affects basic-cable customers who lost two channels.

The $18 a month basic cable service of 15 channels includes broadcast stations and public access channels.

Comcast spokesman Marc Goodman said the relocation of the channels to its digital service frees up space for additional digital and high-definition channels and higher Internet speeds. He also said customers were given ample notice of the change in service before it took effect.

The standard cable package and what Comcast calls its starter digital package are priced the same at $57.45 a month. The digital package, however, has 10 more channels, on-demand programming, 47 music channels and parental controls. But digital subscribers also pay an additional $4 a month to rent the required set-top box.

Comcast is waiving the $4 a month fee for a year for customers who upgrade to digital by Aug. 15.

For basic and standard cable customers who choose not to move up to digital, they wind up paying the same price for fewer channels.

"Fundamentally, people are concerned this action is the equivalent of a rate increase because it's taking channels that they normally have access to and putting them into a higher-priced tier," Department of Public Service spokesman Stephen Wark said Wednesday.

Since Comcast implemented the changes, Wark said the department has received 60 complaints from consumers.

Sanders also received a number of complaints and said he will hold a town meeting to address Comcast's action and the concerns of Vermonters.

Sanders, who has taken on the cable industry in the past, called Comcast a "very greedy" company. While asking its basic cable customers to bear what amounts to a rate increase, he said the company earned $588 million in the first quarter of this year and paid its top executive $134 million over the past five years.

"I think that's wrong," Sanders said of the channel switch. "It's a hidden price increase."

He said he would set up a town meeting to air subscribers' concerns and hear what Comcast has to say.

"You know these are tough times for ordinary people and a company that's making huge profits and paying their CEOs outrageous compensation packages, they ought to ease off on ordinary people," he said.

As a member of the House in the mid-1990s, Sanders said he voted against deregulation of the cable industry precisely because the industry would raise rates at will.

Goodman took issue with Sanders' characterization that moving channels out of the basic and standard service package was tantamount to a price increase.

He said the price for basic and standard cable packages remains the same and customers who switch to digital receive a free box for a year.

Asked whether Comcast should lower rates for its basic and standard cable customers because they're paying the same price but receiving fewer channels, Goodman avoided answering the question directly.

"I'd just reiterate we're offering a free digital box to our standard cable customers for a year and we're also offering those customers discounts on additional outlets," he said. "None of our competitors, DirecTV or Dish Network, offer any analog version of their service."

He also took issue with Sanders' claim that the company was "very greedy."

"We give back to the communities we serve," Goodman said. "In 2007, Comcast provided more than $1 million in direct financial support, donations of services to schools, libraries" and to other nonprofit groups in Vermont, he said.

Wark said the PSD has been in contact with Comcast. He also said the department is undertaking its own legal review before "deciding what the next steps are." He declined to specify what those steps might be.

"We just want to make sure that the Comcast model is not to price Vermonters who opt for the lower end of the affordability tier out of the market," he said. "Not everyone wants to spend a lot of money on cable television."

Ralph Cahee of Fair Haven is one Comcast customer who was satisfied with his $18 a month basic package until he turned on his TV set last week and found two of his channels missing. Cahee called Comcast and was told if he wanted the channels back he'd have to subscribe to the $57.45 a month package.

"Not everyone can afford that other stuff," said the 72-year-old retired state highway worker.

On top of that, he said he's paying for the same $18 a month basic service but receiving two less channels — NECN and CN8. "That kind of frosted me," Cahee said.

In addition to NECN and CN8, standard cable customers also lost MSNBC, truTV, Oxygen and EWTN.

Since the cable industry was deregulated by Congress a number of years ago, states have limited regulatory oversight when it comes to rates.

Wark said cable companies are only allowed one rate increase a year so the question becomes whether Comcast's action is "the functional equivalent of a rate increase and we don't know the answer to that yet until we've completed our analysis."

Also, former Adelphia customers who kept their digital package of channels when Comcast took over the Vermont franchise lost some channels as well.

Goodman said in an e-mail Wednesday that Comcast had maintained the Adelphia package of digital channels as a courtesy.

"Though our recent lineup change is very straightforward for most of our customers, we recognize that it is more complicated for those remaining customers who have yet to transition out of packages offered by Adelphia, which we have voluntarily maintained as a courtesy through the transition to Comcast," Goodman said. "As we manage our investments in programming and in our fiber-optic network to maximize the number of programming choices for the majority of our customers, who have opted to receive one of our digital packages, we cannot customize old Adelphia packages on a customer-by-customer basis."