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City Has Little Clout in Comcast Fee Dispute

Eagan residents are upset over increasing fees. But thanks to an FCC ruling, city officials' hands are—for the most part—tied.

City Has Little Clout in Comcast Fee Dispute

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City officials delved into the rabbit hole of cable fees and franchise agreements  on Tuesday night during a public dialogue between a Comcast official and residents upset by unexpected charges.

The public hearing was prompted by local Comcast subscribers, who voiced concerns over a recent mailing sent out by the company describing a soon-to-be-implemented additional service charge for digital transport adapters.

The Eagan City Council hoped the hearing would shed light on the confusion surrounding the charges, and invited Mike Logan, Comcast's director of government affairs, to attend. Here's what they learned:

WHAT IS A DIGITAL TRANSPORT ADAPTER?

A digital transport adapter, or DTA, is a device that allows older, analog TVs to display digital channels. It's meant for viewers who plug their analog TV directly into a cable wall outlet. Residents with modern TVs in most cases do not need a DTA, because the TV itself has a built-in tuner allowing it to receive digital channels.

WHO PAYS FOR WHAT?

Customers with Basic Cable, the lowest level of service, can get as many as three DTAs for their analog televisions for free—for now. That could change if Comcast decides to implement future fees or service charges for the adapters.

Many Comcast subscribers in Eagan who are using the Digital Starter service or a higher level of service, on the other hand, saw a $1.99 per month rate increase for each adapter beginning in January. Comcast has been notifying other users that they may need to order an adapter will have to pay a monthly fee for each adapter starting March 14. Subscribers with a single TV won't need an adapter and won't be charged with the $1.99 fee, but homes with multiple TVs will need an adapter for each additional television set beyond the first, according to Comcast officials.

WHY ARE CITY OFFICIALS CONCERNED?

Residents affected by the new charges have described it as a "bait-and-switch" situation, according to Attorney Brian Grogan, who represents Eagan on cable franchise matters. Comcast distributed the DTAs to subscribers for free during the digital conversion, and users who received the devices did not expect that they would eventually have to pay for the hardware, Grogan said.

At the same time, city officials say, Comcast has almost universally increased its subscription rates. Digital Starter bundle users with Comcast's Voie Unlimited service saw a 2.2 percent rate increase in January, according to data released by the city of Eagan, while Digital Latino-Selecto subscribers saw a 142.5 percent rate increase during the same period.

Eagan resident Mike Wissbaum, who spoke at the Tuesday meeting, was among those affected by rising rates.

"Over the last three years, my cable and Internet bill has gone from $97  to $137 a month," Wissbaum said. “If I don’t get [DTAs] for free, I’m done with Comcast. You can fight city hall, but you can’t fight Comcast."

WHAT CAN THE CITY DO?

Not much, unfortunately.

In the past, Eagan was able to regulate basic cable rates and fees on all equipment necessary to provide that service. But in 2007, Comcast petitioned the Federal Communications Commission to deregulate the city. The FCC ruled in the company's favor, because Comcast was able to demonstrate that it had "effective competition" in Eagan—15 percent of local residents subscribed to satellite service instead of Comcast.

Eagan lost much of its cable franchise clout and disbanded its cable commission, which served as a liaison between residents and cable providers.

Now, the city has almost no legal standing to fight rate hikes, according to Brogan.

WHAT'S THE NEXT STEP?

Eagan Mayor Mike Maguire and Councilor Paul Bakken asked city staff to send a letter to the FCC and Minnesota's Congressional delegation expressing concerns over the company's actions. The city's franchise agreement with Comcast comes up for renewal in 2015, which may give city officials the opportunity to push for improved customer service and clarity in Comcast's billing standards.

"Clearly, we are investigating what authority with think we have under customer service standards ... and looking forward to negotiating positions for a new franchise," Eagan Communications Director Tom Garrison said.

Comcast representative Mike Logan, who attended the Tuesday meeting, said the company is working to become more receptive and responsive.

"It’s in our best interest as a compay to ensure that we are adhering to the highest level of customer service standards," Logan said.

Correction: This article has been modified to change an inaccuracy. Comcast implemented the rate increase for DTAs in January for many subscribers.

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