FCC probe of cable rates looks at 3 Md. firms Comcast, Metro Vision, MultiVision join TCI as potential targets

November 18, 1993|By Michael Dresser | Michael Dresser,Staff Writer

The Federal Communications Commission, spurred by consumer complaints about cable rates that rose despite a law designed to cut them, yesterday issued "letters of inquiry with investigatory overtones" to 16 cable operators, including three in Maryland.

Fifteen of the companies that received the letters are local systems, but the list also includes Tele-Communications Inc., the nation's largest cable operator. TCI earned its way onto the list because of a memo from a company executive that urged local-system managers to raise rates for a number of services and to blame the government for the increases.

In Maryland, the three companies that received letters were Comcast Cable of Howard County in Ellicott City; Metro Vision of Landover; and MultiVision Cable TV of Lanham.

According to the FCC, the 16 letters identify practices that might violate the rate regulations it adopted to enforce the 1992 Cable TV Act. Those practices include rate changes that might violate the law's revenue freeze; repackaging of regulated services as "a la carte" offerings; and requiring customers to explicitly waive services to avoid being billed for them.

"The result of these inquiries could be used to support enforcement actions if appropriate," the FCC announced.

In a separate statement, FCC Chairman James H. Quello said he was "concerned that the practices that are the subject of our investigation reflect a propensity by cable operators to push the limits of our rules."

In particular, Mr. Quello cited a memo from Barry Marshall, chief operating officer of TCI Cable Management Corp., to local managers, urging them to raise rates for cable-TV services before new cable regulations took effect. "The best news of all is we can blame it on the government now. Let's take advantage of it!" said the internal memo, which became public this week.

Pat Donovan, acting chief of the FCC's cable services division, said that the letter to Edgewood, Colo.-based TCI was the only one that was not the result of a complaint. TCI will be required to choose a "representative" system in its chain and submit an explanation of its charges, he said. TCI operates eight local systems in Maryland, including the United Artists Entertainment system in Baltimore.

Comcast Cable of Howard County, the only Baltimore-area system to receive a letter, said yesterday that the letter it received was based on the complaint of a single individual who wanted an explanation for a $2 increase in his monthly rate.

"From our quick review, nothing's out of order," said David Nevins, a spokesman for Comcast. "We are very confident and sure our rate structure is quite clearly within the law."

Mr. Nevins said that after the law took effect, about 70 percent of Comcast's customers in Maryland saw their rates drop; 30 percent received higher bills.

According to a survey by The Sun in September, the basic Comcast rate in Howard County increased to $9.47 a month, from $7.95, while its "basic plus" service dropped to $21.88, from $23.40.

Margaret Moseley, director of community relations for MultiVision Prince George's County, said her company had not received the agency's letter and had no comment. Officials with Metro Vision, the other Prince George's system, could not be reached for comment.

Most of the recent rate changes were a result of the 1992 Cable TV Act, which Congress passed last year over President George Bush's veto. The legislation was touted as a means to force monopolistic cable TV companies to lower their rates. But when the new rates took effect Sept. 1, many of the companies raised their rates on unregulated services or shifted services from their basic packages to premium packages.

Those rate increases brought an outpouring of vitriol from consumers and prompted many lawmakers to call on the FCC to crack down on the cable operators.

Rep. Edward J. Markey, a Massachusetts Democrat who heads the House subcommittee on telecommunications and finance, has been calling for FCC action for months. Yesterday, he hailed the FCC move.

"This action is strong evidence of the FCC's intent to stand behind their cable rate regulations," Mr. Markey said in a statement. "This sort of vigorous enforcement action by the FCC will put cable companies on notice that the regulators will actively pursue possible violations."

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