TUSTIN, CALIF. -The City Council here last week relented on its threat to pull AT&T Broadband's franchise and instead gave the operator another 60 days to present a plan to mitigate consumer complaints.
The council was swayed after it read a letter from an AT&T Broadband attorney, who noted that the company's first refranchise proposal was part of informal talks on the future of the 9,000-subscriber system. The formal window doesn't open until January and the franchise expires in 2002.
But the city wants the MSO to take action now in order to silence complaints. AT&T Broadband took over the Tustin system from MediaOne Group Inc. earlier this year and inherited such aging-system problems as poor reception and long on-hold times.
Complaints in this city could be a harbinger of things to come in other markets, as operators complete technology conversions and force consumers to upgrade.
The Tustin plant has not yet been upgraded to digital, and to add the channels needed to compete with rivals' offerings, the system is phasing out trap technology and going addressable.
Consumers must accept a $4-per-month converter to access expanded-basic tiers or premium channels. The city estimates the strategy raises rates by $9 for an average home with two expanded-basic connections.
AT&T Broadband also wants an unspecified rate increase in January.
Consumers who call to complain about changes say they have been subjected to hold times of up to 1 hour and 45 minutes.
"We've never had this number of complaints in six years," Councilwoman Tracy Wills Worley said at a hearing last Monday. "You need an apology outreach."
Perry Parks, AT&T regional vice president for government affairs, said the operator has extended lobby hours, is retraining customer representatives and is hiring more people to answer phones.
The company moved too fast to meet the competitive threat to cable from direct-broadcast satellite, he said. In response, the box rollout will be slowed down to allow more time to explain the converters, new products and pricing plans.
"Service hasn't met your expectations, your constituents' expectations and frankly, our expectations," Parks said.
AT&T Broadband intends to track complaints and provide detailed reports to the city. The company is also dedicating more call center operators to Tustin and will re-engineer the whole customer-service process in January.
But when council members complained that "the No. 1 problem is that box," Parks responded, "That box is part of new technology."
Audience members sneered. "This is a home-invasion robbery!" said resident Reed Housch. Seniors can't afford the boxes, he said, and his doesn't work correctly.
When he called the system, a CSR couldn't help him because the issue was too technical, he added. Housch said he was so disgusted he switched his long-distance service to another carrier.
At the meeting, resident Chris Jacobson urged a boycott, and said AT&T would feel a pinch if half the 9,000 customers changed providers. He gave out his telephone number and his cell phone began ringing before the meeting was over.