Boston Mayor Thomas Menino is filing a petition for basic cable rate re-regulation at the FCC Monday, citing three Comcast rate increases in the city and what he says is a lack of competition. The most recent increase came Feb. 19.
"This increase marks the third straight year of hefty increases, totaling more than 60%, on a service that is supposed to be affordable," said Mayor Menino in announcing the filing. The mayor says Boston is being charged more than surrounding cities and towns.
The filing consists of a petition to the FCC to recertify Boston for basic rate regulation -- the FCC ruled the city rates should be deregulated in 2002 in response to a petition from Cablevision; a review of Boston's rate status, and a report the city commissioned on rates between 2002 and the present. The FCC ruled AT&T's broadband system in Boston was subjective to effective competition in March 2002. Comcast bought the system it in December of that year.
According to the City, Comcast's rates were increased by 18% in the most recent increase, from $13.50 to $15.80. It argues that the new services and technologies and investments that Comcast has pointed to have "no impact" on basic, "antenna-level" service.
Boston is served by overbuilder RCN, but only in a limited area, said a staffer in the mayor's press office. "Comcast is the major supplier," he said, while RCN is in "very limited areas. So, Comcast is really it in Boston. The mayor really feels rate regulation is a necessity."
Cable operators are presumed to be monopolies in a market unless they can demonstrate that they are subject to effective competition, which the FCC has defined as a competing provider serving more than 15% of the marketplace. But there is also a less strict test for competition from local phone companies (IECS).
Mike Lynch, director of Cable, Video and Web Services, for the mayor, says that now that RCN has been bought by Abry Partners has bought RCN, it no longer qualifies for the ILEC definition. He concedes Comcast could come back and assert competition via the 15% test, citing cable competition.
"Comcast faces a highly competitive environment across all its product lines, with significant video competition from numerous providers including satellite, RCN, free broadcast and other types of video options," said Comcast Northeast Division spokesperson Beth Bacha. "Comcast's Basic service in Boston continues to be nearly half the cost of any other provider's entry level service - and no other competitor offers a comparable level of service comprised of more than 35 channels of news, information, diversity and public access programming. We believe we continue to offer the most affordable options and best values for consumers. Comcast continues to invest in the City of Boston with next-generation technology for residential customers and businesses alike, and last year alone, invested more than $4.9 million in the City of Boston through foundation grants and in-kind services."