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Comcast Faces Service Hassles in Detroit

1/30/2000 7:00 PM Eastern

Detroit regulators gave Comcast Corp.'s local system until
the end of March to remedy service problems or face financial penalties dating back to
1997.

The Detroit Cable Commission last week was preparing to
notify Comcast that it had defaulted on service standards in its cable franchise covering
125,000 local subscribers.

Worse yet, if the MSO does not remedy the problems by the
end of the first quarter, it faces liquidated damages of up to $750 per day dating back to
1997, when its service woes first surfaced. That could bring the total to about $500,000,
commission chairman James J. Beasley Jr. said.

Just as ominous, the MSO risks having its customer service
become an issue during upcoming renewal talks on its franchise, which is set to expire in
May.

Comcast's 760,000-subscriber Detroit region is an
increasingly important part of what will be an 8 million-subscriber MSO after various
deals get done. Comcast has said it will get more Detroit-area subscribers from AT&T
Corp. after AT&T completes a deal to buy MediaOne Group Inc.

Once notified, Comcast will have 21 days to respond. If it
has not corrected the problems, the city can conduct hearings and issue penalties after
the first quarter.

"The company's own reports indicate that they're not
hitting their [service] numbers," said Carlton Stanton, director of the Cable
Communications Department. "It's our belief that we need to take a compliance
position."

However, Beasley said, the commission decided to give
Comcast added time to cure its problems after noticing a recent "upward trend"
in its service.

"We've seen some radical changes," he said,
"and we understand that it's going to take a little time. We want to forge a
partnership with the company, not take its money."

The company's own service reports were the basis for a
recent story in the Detroit Free Press alleging that between April 1998 and
September 1999, the MSO violated five of the seven federal service guidelines contained in
its franchise.

Meanwhile, company officials have assured the city that its
$20 million upgrade will be completed by the end of March, thereby resolving some of its
service problems.

Comcast has been under fire for not answering 90 percent of
inbound service calls within 30 seconds and failing to install cable service within seven
days. Because of its upgrade, it's also been hit with outages that have unexpectedly left
thousands of subscribers without cable service.

By providing notification of default, the city begins a
process that permits it to hold hearings and impose penalties if Comcast doesn't meet its
March deadline, Stanton said.

Comcast senior vice president Dave Scott said completion of
the upgrade will correct picture-quality and outage problems, while additional trunk lines
and staffing at two new full-service customer-care centers and another
technical-operations center will resolve the telephone and installation problems.

"We feel we have the right mix now," he added.

Scott took issue with the Free Press survey, noting
that the story was based on "raw data" that needed further analysis.

For example, the survey found that during an 18-month
period, Comcast failed to install service within seven days 5 percent of the time; did not
respond to 95 percent of service complaints within 24 hours during 13 months; and failed
to promptly answer 90 percent of incoming calls during 11 months.

Scott conceded that telephone-response times were off
during some months, but he said the overall 18-month average was 94 percent, or above the
Federal Communications Commission's guidelines.

Moreover, he added, installation figures were skewed when
the company mistakenly included instances when customers were not home or voluntarily
rescheduled their appointments.

The company plans to restate those figures, and it expects
to be found in compliance, he said, adding, "We have consistently been making four
out of seven FCC standards."

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