By Arshad Mohammed
Washington Post Staff Writer
Saturday, August 12, 2006
Comcast Corp. said yesterday that it would raise cable TV rates by $2 a month for its 1.6 million Washington-Baltimore area customers this fall because of the cost of carrying the network that broadcasts most of the Washington Nationals' baseball games.
Mid-Atlantic Sports Network, which has the TV rights to the team's games, accused Comcast of gouging its customers and unfairly trying to blame the regional sports network for the rate increase.
A 15-month dispute between the two companies appeared to have been settled last week when Comcast, the largest cable company in the country and the dominant provider in the Washington region, agreed to carry the channel.
"MASN's programming is very expensive to distribute. It will cost literally hundreds of millions of dollars over the next decade," Comcast Executive Vice President David L. Cohen said in a written statement. "These are costs that ultimately will have to be borne by cable customers. Comcast does not intend to profit from the carriage of this new network, but its significant cost makes it necessary to pass along a price increase to our customers."
Four other TV providers -- Cox Communications Inc., News Corp.'s DirecTV, RCN Corp. and Verizon Communications Inc. -- carry the channel but said they have not raised rates as a result.
"This is a deceitful effort by a cable monopoly that made a half-billion-dollar profit last quarter to find a scapegoat for its annual rate increases," Mid-Atlantic spokesman Todd Webster said in a written statement. "Comcast is gouging its subscribers once again and misrepresenting the amount it is paying to carry the Nationals games."
Terms of the deal between Comcast and Mid-Atlantic were not disclosed last week. Mid-Atlantic said yesterday that Comcast would pay about $1.25 per subscriber per month to carry the Nationals games this season.
Webster would not say what Comcast would pay for the channel next season, when Mid-Atlantic is expected to add Baltimore Orioles games to its network. But he said "there should be no net increase to Comcast customers, since they are already paying for Orioles games on Comcast SportsNet."
Comcast SportsNet is a regional sports network owned by the cable company.
Comcast spokeswoman Jennifer Khoury said the $2 increase reflects the cost to Comcast for carrying Mid-Atlantic Sports Network. "MASN's statements . . . show a lack of familiarity with the provisions of the carriage agreement and with the basics of the cable television marketplace," she said.
Gene Kimmelman, senior policy director at Consumers Union, said Comcast and many other cable TV providers "are already charging inflated prices because there is no meaningful competition. So this is just another excuse to raise rates."
"I am not disputing that their costs may be going up, but they have already priced so much above their costs that consumers are getting ripped off," Kimmelman said.
Comcast said the price increase would affect about 1.6 million customers in the Baltimore-Washington corridor who will start receiving the channel around Sept. 8 -- three weeks before the Nationals' season ends.
The company has not yet decided whether to raise rates for 600,000 subscribers in more distant parts of Western Maryland, Virginia, Delaware and Pennsylvania who will get access to the games over the next two years.
The $2 increase is separate from rate increases Comcast typically announces at the end of the year. In the Washington area, Comcast said it raised rates 6.3 percent for 2005 and 5 percent for 2006.
The customers affected by the $2 increase will be those who subscribe to Comcast's "expanded basic cable" service. Expanded basic costs $46.13 a month in the District and includes 76 channels, the company said.
The rate increase will not affect customers who subscribe to the basic cable plan -- which costs $13.45 for 29 channels in the District -- or those who get only Internet access or telephone service from the company.
Comcast declined to say whether it might defray the cost of the new channel by selling advertising or dropping other channels from its lineup.
Comcast said subscribers would begin to get notifications of the rate increase this month and that it would go into effect in the coming months, depending on rules set by local franchising authorities.
"The rate increase shouldn't be a big surprise given that sports programming is the most essential programming for distributors to have," said Paul Gallant, an analyst for Stanford Washington Research Group. "Without knowing what Comcast's underlying costs are, no one can know whether they are charging more than the cost of obtaining the channel."
Staff researcher Madonna Lebling contributed to this report.