Cable War Fails to Offer Rate Relief in Montgomery
Sunday, February 18, 2007
Bills for thousands of Montgomery County cable viewers will increase by 4 percent starting March 1, when Comcast Corp., suburban Maryland's largest cable television provider, raises rates throughout the Washington region.
Montgomery leaders had hoped that competition from a new provider, Verizon Communications Inc., would help lower prices. But Comcast said recently that cable bills would climb in line with increases for subscribers throughout Maryland, the District and Northern Virginia.
The announcement comes after the county fined Comcast twice in the past six months for failing to meet benchmarks for customer service.
Comcast officials said the higher rates reflect costs such as adding video titles for viewers and improving customer service. Spokeswoman Lisa Altman said the company plans to hire more than 700 people in the region, including 300 who will serve Montgomery, Prince George's and Frederick counties.
The Montgomery and Prince George's county councils signed off in November on agreements to allow Verizon to begin offering fiber-optic television service. Company officials hailed the "benefits of choice" for customers, including less expensive service.
Verizon has since raised its rates for new customers by 7.6 percent. And RCN, the third company that offers cable television service in Montgomery, raised its base price last month by 15 percent.
Some Comcast customers remain upset about a $2-a-month increase they received in September as part of what the company said was the cost of offering the Mid-Atlantic Sports Network, which broadcasts Washington Nationals baseball games.
So much for the idea that "competition will bring down rates," said Montgomery County Council President Marilyn Praisner (D-Eastern County), who has long clashed with the industry over regulation. "That clearly hasn't happened."
Congress deregulated most cable rates in 1996, opening the door to competition but leaving local jurisdictions with little authority over pricing. County officials can regulate only the most basic service.
Consumer advocates have been encouraged by Verizon's entry into the high-speed cable television market as the company has introduced its fiber-optic service in jurisdictions throughout the region.
Analysts say the rates' continued increase suggests that the companies do not intend to compete on cable prices alone.
"We all need to be very skeptical about the promise of price relief until it is actually realized," said Jeannine Kenney, a senior policy analyst with Consumers Union.