Comcast plans no cable service changes in city for now

Increase in rates is set for counties

May 11, 2001|By Andrea K. Walker | Andrea K. Walker,SUN STAFF

Comcast Corp. said yesterday that Baltimore subscribers won't see immediate changes in station lineup or their bills when its deal to buy the city's cable system from AT&T Corp. closes by the end of June.

"We need to get in there and take control of the system, and there are things that get evaluated once we're actually there," said Comcast spokeswoman Jenni Moyer. "Right now we just have the agreement that this is going to happen."

However, Comcast customers in some of Baltimore's surrounding counties are about to see the cost of their service increase because of upgrades throughout the system.

Philadelphia-based Comcast will pay $500 million in cash for the Baltimore system, which serves 110,000 customers and is operated by AT&T under the TCI Communications name, according to filings with the Securities and Exchange Commission.

The Baltimore deal is part of a string of acquisitions made by Comcast - including one announced May 1 for systems in Ocean City, Cecil County and Delaware. The nation's third-largest cable provider has spent about $16 billion positioning itself as the main cable company for the mid-Atlantic region.

The agreement to buy the Baltimore system, one of Comcast's last hurdles, was announced in 1999.

AT&T has been selling cable systems to reduce debt it acquired while becoming the largest cable-TV operator.

AT&T has about 14.9 million cable subscribers; Comcast has about 8.4 million.

In February, Comcast bought Home Team Sports, a regional sports channel that serves the Baltimore/Washington area and airs games of the Baltimore Orioles, Washington Wizards and Washington Capitals.

Even without the city's customers, Comcast is already the Baltimore area's largest provider, serving Howard, Harford, Anne Arundel, Calvert, Charles, St. Mary's and Baltimore counties.

This "clustering" allows Comcast to operate more efficiently and provide its customers with more stations and services, such as digital cable and high-speed Internet service.

"It's going to provide tremendous regional services for those who are within these systems," said David Goldsmith, an analyst with Buckingham Research Group. "The more money and resources you have, the lower the cost will be to provide more services."

But more stations often mean higher rates, because of programming costs placed on the cable companies, analysts said.

Moyer said no decision about rates has been made for Baltimore. Analysts, however, say it's probable that costly system upgrades will have to be made once the deal is done.

Customers in Calvert, Harford, Howard and Baltimore counties will see rates rise June 1 because of fiber-optic upgrades throughout the system, an increase in channels and a 20 percent rise in gas prices. Calvert subscribers will get a 3.3 percent increase and the other counties 5.5 percent.

Comcast shares lost $1.15 yesterday, or 2.7 percent, to close at $41.76 on the Nasdaq stock exchange.

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