Dubuque Officials OK AT&T Late Fee

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AT&T Broadband & Internet Services has talkedofficials in Dubuque, Iowa, into allowing the company to implement a monthly late fee inits local system, starting this month.

At AT&T's request, the city passed a resolutionpermitting a "reasonable" fee for unpaid bills, but withheld approval of the $5charge imposed by the system.

"We're going to wait and see if this late feefunctions the way the cable company told us it will," said Dubuque cable franchisingadministrator Merrill Crawford. "They may be able to justify it. They may not be ableto justify it."

In the interim, the city will monitor a series of lawsuitschallenging the industry's late-fee practices.

If the courts rule that cable operators must slash theirlate fees -- or if there are more consumer complaints -- then the city can address theissue in a special ordinance or when the operator's cable franchise comes up forrenewal in 2001, Crawford added.

"We didn't feel like we needed to be on thecutting, bleeding edge of this issue right now," Crawford said.

AT&T will collect the fee from subscribers who fail topay up within seven to10 days of the printed date on the bill. Under its existingfranchise, the operator could not take action until the 15th of the followingmonth.

"And then it was the ultimate penalty:disconnection," Crawford said.

System general manager Kathleen McMullen said the fee wouldbe assessed only when the next month's billing cycle begins and the previousmonth's bill has not been paid.

"Obviously, some people will not he happy about beingassessed a late fee," McMullen said. "But the rationale is that only people whohave not paid their bills will be charged the fee."

In convincing the city council, AT&T argued that theexisting policy resulted in a disproportionate number of disconnects each month. It alsoforced work crews to disconnect, then reconnect subscribers, and meant more time was spentcalling delinquent subscribers or fielding complaints from customers whose service hadbeen turned off.

"You can also argue that you're doing thesubscriber a favor by charging them a $5 late fee," McMullen said. "It's awakeup call to them, because you're saving them the cost of a reconnection fee, whichright now is $18.75."

It's unlikely a late fee would prompt many of AT&TBroadband's 22,000 local subscribers to disconnect, though.

Working in its favor is the universal need for its servicein Dubuque, which sits on the Mississippi River across from Wisconsin and Illinois. Withthe city situated between a series of steep hills and bluffs that makebroadcast-television reception virtually impossible, cable has achieved ahigher-than-usual penetration rate among area households, Crawford said.