Comcast Faces Modesto Fines

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City officials in Modesto, Calif., will decide June 24
whether to find that Comcast Corp. is in breach of its contract there for
failure to protect its subscribers from potential electric shock.

A staff report also recommended that the City Council consider fining Comcast
between $671,000 and $1.3 million per month until all home drops are
properly grounded.

Comcast has asked for an extension of its agreement to correct the grounding
deficiencies until December 2004, noting that it just acquired the system and the
electrical problems, which date back through multiple owners to February
2001.

But the city noted that the new owner acknowledged the problems when it accepted
the transfer of ownership and agreed to fix the problems by March of this
year.

According to Kramer Firm Inc., the inspector hired by the city, as many as
22,379 homes in the city -- approximately 26% of local homes -- are improperly
grounded.

This means that in the event of a power surge, a consumer in contact with the
cable equipment and another metal object could receive an electrical shock.

Because the city is aware of the deficiency, the city could be among the
parties found liable should an injury occur, for it has "constructive notice" of
the danger.

City staff is recommending the breach declaration.

The city has multiple remedies, including revocation.

Monetary penalties are set at $5,000, plus $100 per day of the violation,
according to franchise agreements. The staff report interprets the $100 to be
per home.

Under that scenario, the city could collect as much as $67 million per month
in penalties, the report noted.

But staff recommended a penalty of 1% to 2% of the amount Modesto could be
entitled to collect.

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