Thursday, February 02, 2006

Don't Spend It All In One Place

Montgomery County customers of Comcast will be receiving a $2.50 refund thanks to the efforts of the county's cable office. I know it doesn't sound like a lot but if you multiply $2.50 times the number of Comcast subscribers (roughly 200,000 in MC) that's half a million dollars that Comcast has to give up. And unlike the lawyers in a typical class action lawsuit, the Cable Office doesn't get to keep any of it. Anyway, it's $2.50 each of us overpaid. It's our money. (And if you still think $2.50 is chump change, send it to me - I'll find a use for it.)

So How Did We Overpay By $2.50 Anyway?

As a cable operator, some of Comcast's rates are regulated (basic cable for instance). Included in those regulated rates are rentals (such as remotes) and installation fees. To make a long story short, those rates must be "reasonable" as calculated based on their true costs. Cable operators are not allowed to charge in excessive of those rates. That's the good news. The bad news is that the cable operator can charge first and the local franchise authority can only protest after the fact. (If you think automatic billing is bad, this is even worse.) And that's exactly what happened here. Comcast raised the rates. The county protested. And roughly a year later, the county eventually won the case.

Comcast has already set new rates for this year - these may or may not be appealed as well. What is more interesting though is that past rates have been specific to the local franchise area. The new rate filings (known by the FCC Form name of "1205") are national. To me, it doesn't make sense to have a national rate but I'm not complaining. Intuitively, installation ought to cost more in areas like ours where labor is more expensive. So we should be getting a break. Sort of anyway - because a nationwide system ought to simplify Comcast's own accounting, billing, customer service, and legal practices, so maybe they'll save enough money to make it up.

The county is not as shortsighted as me and sees the opposite view. Moving to a national rate means that we have less control over the local franchise. That will make it more difficult for the county to question and fight Comcast over rates that appear to be excessive. It is worth looking at the fight over Comcast's privacy policy. By rights in our franchise, we are entitled to a certain degree of oversight of the privacy policy. However, ever since Comcast moved to a national policy, it's been effectively impossible to get them to change their policy, despite the gaping holes in it that never would have been permitted in the past. Comcast's attitude is: But we can't change it for Montgomery County, it's a nationwide policy!

As Comcast moves to nationalize additional practices, we can expect more of this with a consequent loss of control not only from the county cable office but from Comcast's local headquarters as well.


Anonymous said...

Is anyone offering refund loans?

Anonymous said...

i always love to read stuff from people who have a serious entitlement complex. what's refreshing about your blog is that you not only have the complex, but you put a lot of effort into. well, i guess everybody needs a hobby.

Don Libes said...

If you mean "entitled to getting my money's worth" then yes, I have a serious entitlement complex. If you mean the more traditional definition of "getting something for nothing" then I'd like to hear from you where I've expressed that view.

In fact, I'll go even farther. If you'd like to write an opposing view point, I'd be happy to post it as an entry in this blog. It can disagree with my views but please make sure it is coherent, logical, etc. Thanks.

David said...

Hmmm, didn't seem to take up the offer. Maybe Comcast laid him/her off?