Kent, Comcast, reach agreement after argument over fee

Kent city officials reached an agreement with Comcast to remove a monthly network add-on fee charged to cable subscribers. This Comcast office in Auburn also serves Kent residents.

Kent city officials reached an agreement with Comcast to remove a monthly network add-on fee charged to cable subscribers. This Comcast office in Auburn also serves Kent residents.

Kent city residents who subscribe to Comcast for cable television could see a small reduction starting with their July bill. The Kent City Council is expected to act on a resolution June 16 formalizing that agreement.

City and Comcast officials on Tuesday reached an agreement to have the company drop a $1.16-per-month network add-on fee. Comcast began charging that fee in 1999 to help pay for an upgrade to a fiber optic rather than copper-wire cable system. Fiber optics allow transmission over longer distances and at greater bandwidths.

The problem was, the work had since been done and funded, but the company reportedly kept charging for it.

The Operations Committee of the Kent City Council recommended Tuesday that the Council adopt a resolution requiring Comcast to drop the fee. The Council is expected to vote on the resolution June 16.

“Our opinion is they are done collecting the amount needed to recoup their costs, but they wanted to still charge a fee,” said Dea Drake, city multi-media manager and franchise administrator. “We’ve come to the agreement that they will stop charging $1.16 per month starting July 1st.”

In return, city officials agreed not to make Comcast prove at what point the company actually recovered the cost of the upgrade and to potentially issue refunds.

“We would have had to audit them,” Drake said. “That’s somewhat costly and difficult to do. We will not go back to request refunds.”

Regulations by the Federal Communications Commission require Comcast to file an annual report to the city to justify proposed rates for basic cable packages, installation charges and associated equipment, in return for the franchise rights to provide cable services in the city. The FCC and city do not regulate cable prices beyond the basic service, such as digital packages or expanded basic.

FCC rules allow cable providers to charge the network add-on fee to pay for the upgrade, but do not specify an end date of when those costs would be recovered.

Michael Bradley, a Saint Paul, Minn., attorney who specializes in cable television contracts, served as a city consultant and reviewed the Comcast rate forms. Bradley stated in a May 27 letter to the city that the fee should be dropped. Bradley also helped the city reach an agreement with Comcast to drop the fee.

The dropped fee will save Kent subscribers to Comcast a total of about $309,000 per year or about $1.5 million over five years, Bradley wrote.

A Comcast spokesman disagreed with the Bradley on whether customers would actually see any savings on their bills because of a complicated formula used to figure the basic cable rate.

“It changes the formula, but not necessarily the price,” said Walter Neary, a Comcast public relations director, in a phone interview Wednesday. “It’s not (a fee) broken out on the bill. There’s a formula used in the calculation and it takes out one factor.”

Comcast currently can charge as much as $15.30 per month for basic cable, a maximum-permitted rate of $14.14 plus the add-on fee of $1.16. Under the new rate order starting July 1, Comcast would be able to charge a maximum-permitted rate of $14.78 per month for basic cable with no add-on fee.

The cable company plans to keep the rate at $14.14, Neary said.

Bradley, the city consultant, recommended against a full-blown rate review in an effort to recover potential refunds. He wrote such a review could take as long as five years and cost the city more than $30,000.

Councilman Tim Clark summarized the deal at the Council’s Operations Committee meeting.

“Comcast agreed to this, so we can sign off and go on to the next thing,” Clark said.

Kent, Comcast, reach agreement after argument over fee

By Steve Hunter

shunter@kentreporter.com

Kent city residents who subscribe to Comcast for cable television could see a small reduction starting with their July bill. The Kent City Council is expected to act on a resolution June 16 formalizing that agreement.

City and Comcast officials on Tuesday reached an agreement to have the company drop a $1.16-per-month network add-on fee. Comcast began charging that fee in 1999 to help pay for an upgrade to a fiber optic rather than copper-wire cable system. Fiber optics allow transmission over longer distances and at greater bandwidths.

The problem was, the work had since been done and funded, but the company reportedly kept charging for it.

The Operations Committee of the Kent City Council recommended Tuesday that the Council adopt a resolution requiring Comcast to drop the fee. The Council is expected to vote on the resolution June 16.

“Our opinion is they are done collecting the amount needed to recoup their costs, but they wanted to still charge a fee,” said Dea Drake, city multi-media manager and franchise administrator. “We’ve come to the agreement that they will stop charging $1.16 per month starting July 1st.”

In return, city officials agreed not to make Comcast prove at what point the company actually recovered the cost of the upgrade and to potentially issue refunds.

“We would have had to audit them,” Drake said. “That’s somewhat costly and difficult to do. We will not go back to request refunds.”

Regulations by the Federal Communications Commission require Comcast to file an annual report to the city to justify proposed rates for basic cable packages, installation charges and associated equipment, in return for the franchise rights to provide cable services in the city. The FCC and city do not regulate cable prices beyond the basic service, such as digital packages or expanded basic.

FCC rules allow cable providers to charge the network add-on fee to pay for the upgrade, but do not specify an end date of when those costs would be recovered.

Michael Bradley, a Saint Paul, Minn., attorney who specializes in cable television contracts, served as a city consultant and reviewed the Comcast rate forms. Bradley stated in a May 27 letter to the city that the fee should be dropped. Bradley also helped the city reach an agreement with Comcast to drop the fee.

The dropped fee will save Kent subscribers to Comcast a total of about $309,000 per year or about $1.5 million over five years, Bradley wrote.

A Comcast spokesman disagreed with the Bradley on whether customers would actually see any savings on their bills because of a complicated formula used to figure the basic cable rate.

“It changes the formula, but not necessarily the price,” said Walter Neary, a Comcast public relations director, in a phone interview Wednesday. “It’s not (a fee) broken out on the bill. There’s a formula used in the calculation and it takes out one factor.”

Comcast currently can charge as much as $15.30 per month for basic cable, a maximum-permitted rate of $14.14 plus the add-on fee of $1.16. Under the new rate order starting July 1, Comcast would be able to charge a maximum-permitted rate of $14.78 per month for basic cable with no add-on fee.

The cable company plans to keep the rate at $14.14, Neary said.

Bradley, the city consultant, recommended against a full-blown rate review in an effort to recover potential refunds. He wrote such a review could take as long as five years and cost the city more than $30,000.

Councilman Tim Clark summarized the deal at the Council’s Operations Committee meeting.

“Comcast agreed to this, so we can sign off and go on to the next thing,” Clark said.


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