Cable fee in city to rise 6%

TCI denies increase was linked to end of regulation March 31

May 04, 1999|By Mark Ribbing | Mark Ribbing,SUN STAFF

Little more than a month after the end of federal regulation of cable rates, TCI Communications of Baltimore, the city's cable company, said yesterday it would raise the price for expanded basic service, the most popular choice, 6 percent next month.

Customers who receive TCI's expanded basic package will see their bills increase from $28.93 to $30.66 a month, not including premium channels and other charges.

TCI also said it would boost the price of basic cable, which includes broadcast network stations and a few additional channels, 2.7 percent, from $11.22 per month to $11.52 a month.

FOR THE RECORD - In an article in yesterday's editions, The Sun incorrectly reported that Prestige Cable TV increased its rates in Carroll County on April 15. In fact, Prestige has enacted no rate increase this year. The Sun regrets the error.

In addition, the monthly cost of a cable box will go up 10 cents, to $3.35. The monthly price of a remote will rise 5 cents, to 35 cents.

Industry experts, public officials and consumer groups had warned that the March 31 end to regulation could lead to steep cable price increases.

Brad Anderson, TCI's vice president and manager for the Baltimore-Washington region, said the new increases had nothing to do with the end of regulation.

"This rate increase would have passed absolutely any rate criteria, so there's absolutely no relation," he said.

Mark Cooper, research director of the Consumer Federation of America and a critic of cable industry pricing practices, said of TCI, "They have not changed. They increase their prices just enough without getting a political reaction."

TCI, which has about 110,000 customers in Baltimore,raised expanded-basic rates 20.2 percent and basic rates 42.6 percent between 1995 and 1998. During the same period, the consumer price index, a standard measure of inflation in the overall economy, went up 7 percent.

The roster of channels in TCI's expanded basic package increased from 75 to 80 during those years.

Better programming

The company said the rate increases were due to higher business expenses. "The programming gets better, so you pay more for it," said Anderson.

"The programming cost is probably the single biggest factor" in the rate increase, Anderson said, adding that TCI has spent heavily to improve its customer service, long seen as a weak point for the company.

TCI Communications of Baltimore is a subsidiary of Tele-Communications Inc. of Englewood, Colo., which was acquired by AT&T Corp. in March.

Scott C. Cleland, an analyst with Legg Mason Precursor Group in Washington, said becoming part of Ma Bell could alleviate TCI price increases a bit, since AT&T will want political support for its other telecommunications operations.

`Want to behave'

"It's going to want to behave," Cleland said of TCI.

"With AT&T as the ownership, they have a much bigger regulatory profile in Washington."

TCI is not the only cable company in the area to declare a rate increase this year.

On April 15, Prestige Cable TV, which serves Carroll County, raised its basic rate 2.7 percent and its expanded basic rate 7.8 percent.

Millennium Digital Media, one of two cable television providers in Anne Arundel County, raised its expanded basic rate by 5.7 percent to $28 per month April 1.

The largest cable company in the Baltimore area, Comcast Corp., said it does not plan a rate increase this year, said Mitchell Schmale, a company spokesman.

Comcast has 300,000 customers in Harford, Howard and Baltimore counties.

Morgan Broman, Federal Communications Commission spokesman, said the March 31 expiration date does not appear have led to a significant rise in rate increases nationwide.

"I can't say that I've heard of a lot," he said. "There may be more coming."

Sun staff writer Mark Guidera contributed to this article.

Pub Date: 5/04/99

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