A rate challenge by about 100 cities and regional regulatory authorities from across the country prompted Comcast Corp. to agree to refund about $2.6 million to consumers.
Refunds averaging $2 per household will be made to about 1.3 million Comcast subscribers during the next two months. That represents about 2% of Comcast’s universe. The rest of Comcast’s regulators accepted the operator’s pricing representations on its federal filing.
A spokesman for the Philadelphia-based MSO stressed that his company followed federal law and industry standards to set the rates the communities challenged. But the dispute was “costly and time-consuming,” so Comcast opted to end it, spokesman Tim Fitzpatrick said.
“This settlement resolves outstanding disagreements regarding the methodology used to calculate rates for equipment and related installation activities, and this agreement will reduce the likelihood of similar disputes in the future,” he said.
Communities involved in this challenge raised questions about Comcast’s national rate filings in 2004.
The local franchising authorities hired an accountant, Florida-based Ashpaugh & Sculco LLC, and Colorado-based Front Range Consulting Inc. to analyze the filing the operator made to the Federal Communications Commission. They concluded that Comcast had overcharged for some service calls and equipment costs.
For example, the analysis claimed Comcast might be overcharging by as much as $13 to connect a previously unwired house. Hourly rates for service calls, HDTV receivers, basic receivers and remote controls were also too high, the consultants claimed.
Based on the report, client cities and regional cable authorities, including the Metropolitan Area Communications Commission outside Portland, Ore., ordered Comcast to roll back rates.
Other participants in the challenge included Arlington and Montgomery counties in Virginia, regulators from the Denver metro area and small, individual towns such as Murfreesboro, Tenn.
The cities paid 10 cents per Comcast subscriber to fund the rate analysis.
Comcast responded to the rate rollback orders by filing an appeal with the Federal Communications Commission in 2004. That still-pending action was withdrawn as part of the settlement.
In 2005, even more communities joined the 94 that challenged the 2004 rate hikes. Consumers whose cities joined the challenge in its second year will receive refunds of less than a dollar.
Refunds in the cities that initially challenged the rate will average more than $3.
Dick Treich of Front Range Consulting said there are no plans at this time to analyze Comcast’s 2006 rate filing. That FCC filing is due March 1.