Adelphia Hikes Commercial Rates - Multichannel

Adelphia Hikes Commercial Rates

Author:
Publish date:

Adelphia Communications Corp. has told a number of its commercial subscribers in Los Angeles that their bills will more than double in March.

Perhaps to offset the hike, the company also notified those customers that they could now elect to take some high-priced sports networks on an à la carte basis.

"Adelphia is adjusting its cable rates for certain commercial properties following an internal review that showed that the company had been inadvertently charging residential rates to many of these commercial customers," said a statement provided by the company.

A spokesman did not address how many accounts were undercharged.

According to letters that went out to businesses in the Los Angeles area — Adelphia's largest cluster — the commercial rate increases add $58.95 to what had been a $47.50 bill for expanded basic cable. A digital set-top charge adds another $6.50.

A letter to one West Los Angeles business, dated Feb. 12, stated: "Fox Sports World and ESPN Classic renewed their agreements and found that Adelphia, as with all cable companies, was charging residential rates for networks instead of standard commercial rates."

An ESPN spokeswoman would not comment on specific Adelphia rates, but said the network requires all affiliate MSOs to submit affidavits determining the number of commercial accounts, and periodically conducts audits to confirm the numbers.

Fox Cable Networks Group executive vice president of affiliate sales and marketing Lindsay Gardner said Fox Sports World has not increased its commercial licensing fees to any MSO, including Adelphia, but declined further comment on specifics.

Other MSOs contacted by Multichannel News
said they weren't changing their commercial rates for the sports networks.

"It's my understanding that we are in full compliance" with the commercial rate card, Comcast Corp. spokeswoman Jenni Moyer said.

The new rate would charge $9.95 a piece for ESPN News and ESPN Classic, and hike rates for Fox Sports World by a whopping $38.95.

The Adelphia corporate statement said the revised rate structure was based on the seating capacity of each establishment and reflects "commercial rates we — and all cable providers — are required to pay each of our sports programming providers."

But the letter forwarded to Multichannel News
was from Johnathan Kramer of Kramer.Firm Inc., a cable TV consultant who does not purchase cable programming for public viewing.

Kramer and area regulators questioned whether the notice violates the state's Video Customer Service Act or local customer-service standards.

The state policy does not specifically exclude commercial or business subscribers, argues one municipal attorney.

Adelphia might be able to prove that it gave business consumers less than 30 days notice of the hikes because network demands took away its control of the situation.

The city of Los Angeles also enforces Multichannel Video Providers Consolidated Consumer Service Standards that demand 30-day notice of rate or packaging changes. Sources assert that the city's definition of "customers" applies to businesses.

Municipal consultants also question whether the notice constitutes an illegal negative option. The notice advises consumers that if they did nothing by Feb. 28, they would continue to receive the channels but would also be charged the higher rate.

The only way to avoid the charge is for the consumer to call Adelphia's accounts manager and dump the channels, or opt in for one or more on an à la carte basis.

Negative options are illegal under state and federal law.

Kramer's reply: Thanks, but no thanks, to a 124 percent rate increase.

"Hey, come to think of it, since my commercial expanded basic rate isn't going down, yet they're eliminating the sports channels in question, they're still getting a rate increase one way or another!" he added in an open letter on his Web site.

R. Thomas Umstead contributed to this story

Related