Minnesota City Fights Back Against Comcast Rate Hikes

Following Comcast’s decision to start charging $1.99/month for previously free converter boxes and a nearly 10% rate hike for some customers, the mayor of Eagan, MN, has written lawmakers and regulators asking for the right to rein in what the city’s residents pay for cable.

Eagan, a city of around 65,000 people, located just to the south of Minneapolis, used to regulate rates for basic cable and equipment fees, but in 2007 the FCC determined there was enough competition from satellite TV service providers in the city to allow Comcast to charge what it deems fit.

But the mayor says what little competition there is in town has done nothing to keep cable rates down. Further, he points to the FCC’s own reports showing that satellite service alone does not cause sufficient levels of competition to landline cable, especially when one considers that monopolistic cable providers are often the only ones providing high-speed Internet access to homes.

“In short, [satellite] is not a true competitor to wireline,” writes the mayor in a letter to U.S. Senators Amy Klobuchar, Al Franken, Congressman John Kline, and the FCC Media Bureau’s Deputy Chief. “Moreover… DirecTV cautions that due to trends in bundling and multi-platform video programming delivery, the ‘video only market’ no longer captures competitive challenges, broadband is becoming the ‘anchor’ product of the wireline MVPDs, and service bundles that include broadband are difficult for [satellite] providers to compete with.”

Eagan is requesting the ability to restore local authority to regulate cable service and equipment rates, require transparent pricing from cable and satellite companies so consumers can see all prices and fees before deciding which service to choose, and for the FCC to revisit the effective competition standards created by Congress in 1992, which many argue have become antiquated because of consumers’ reliance on broadband Internet access.

Last year, the mayor of a much larger city, Boston, argued a similar case to the FCC and won back the city’s right to regulate cable prices.

City Lodges Formal Complaint Over Comcast Fees, Business Practices [Eagan Patch]