August 12, 2008

By Senator Bernie Sanders

They say the only things that are certain in life are death and taxes, but if you are a customer of one of the cable TV giants you can add constantly-rising rates and bad service. Many Vermont subscribers to Comcast - the nation's largest cable company and the service provider for 83 percent of Vermonters who have cable - are seeing that truism played out once again. Comcast has decided to remove up to 13 channels from its analog cable packages without any reduction in the price customers pay. In a meeting in my office, a Comcast executive held to the view that this is not a price increase. That type of executive math may explain the corporate world's seemingly ceaseless accounting problems, but in Vermont we all know that when you get less for the same price, it is a price increase.

Comcast has offered to help people who want to keep all of their channels make the transition to digital cable, but digital cable subscribers need to lease a box (from Comcast, of course) at a rate of $3.95 a month for now. Comcast is offering to waive that fee for a year, after which subscribers will pay the full price for each box they rent for every TV in their home. That means you will end up paying more to keep what you used to have. In Vermont, that's a price increase, too.

The right thing for Comcast to do would be to lower the cost of analog packages if they are going to provide fewer channels. Likewise, if people choose to switch to digital to retain all their channels, Comcast should hold those people harmless - meaning they should get the use of a digital box at no charge and keep the same pricing plans.

Sadly, the latest increases are part of a pattern of ever-escalating cable price hikes since Congress, over my objection, deregulated the cable industry in 1996. Competition was supposed to ensure fair prices and good customer service. Instead, according to the Bureau of Labor Statistics, nationally, cable prices have risen 77 percent since 1996, roughly double the rate of inflation. In rural places like Vermont, competition often is non-existent. The monopoly pricing power that follows allows companies like Comcast to rake in huge profits - $2.58 billion in 2007 - and pay their executives exorbitant salaries. Comcast's top CEO received $134.6 million over the last five years. The profits and exorbitant salaries are occurring at the same time that Comcast, by most measures, provides pretty dismal customer service. Last year, over a six-month period, the Vermont Department of Public Service received 952 Comcast consumer complaints. The largest single type of complaint focused on rates and bills. In a recent national survey conducted by the University of Michigan, Comcast tied for last in terms of customer service among cable, satellite and television providers. It was dead last in landline telephone service.

Comcast's recent moves in Vermont also show another problem with the current system of unregulated cable companies. Comcast apparently made the decision about which channels to strip based on some statistical data, but without any consultation with the people who watch those channels. One of the networks widely targeted for removal was EWTN, which provides Catholic religious content. With our cold winters, mountainous geography, basic cable service is the television lifeline for many older Vermonters. In the case of many older Vermont Catholics EWTN is (or was) their spiritual lifeline as well. It is this kind of insensitive nickel-and-diming by an unregulated monopoly that the more than 100 Vermonters who have contacted my office complain about the most.

Perhaps one solution to Comcast being out of touch with its Vermont subscribers would be for Comcast, and other cable providers, to agree to periodic public meetings in Vermont to discuss issues such as channel lineup and pricing. To make the meetings meaningful, they should be held under the auspices of some state or local authority. That way, Vermonters could give their feedback directly to the company and company leaders would (hopefully) get a better understanding of how their policy decisions affect real people.

That won't happen tomorrow but in the meantime my office has scheduled a town meeting at the Rutland City Town Hall on August 14, 2008, at 7 p.m. Comcast representatives will be present, as will state officials and a consumer group.

We've already had one small success. During the meeting in my office, Comcast agreed that they would waive the $16.95 installation fee for those analog customers who lost channels and choose to go to digital. In addition, those who have already paid the fee will get a credit on their bill.

Again, I hope Vermonters will use the August 14th meeting as a chance to have their voices heard on this issue. Maybe we can start a dialogue that will convince Comcast to stop picking the pockets of Vermont customers. If you cannot make it to the meeting but would like to share your views on this matter, please call my office at 1-800-339-9834 or send me an e-mail at http://www.sanders.senate.gov/qa/comcast.cfm.