AT&T Broadband & Internet Services has talked
officials in Dubuque, Iowa, into allowing the company to implement a monthly late fee in
its local system, starting this month.
At AT&T's request, the city passed a resolution
permitting a "reasonable" fee for unpaid bills, but withheld approval of the $5
charge imposed by the system.
"We're going to wait and see if this late fee
functions the way the cable company told us it will," said Dubuque cable franchising
administrator Merrill Crawford. "They may be able to justify it. They may not be able
to justify it."
In the interim, the city will monitor a series of lawsuits
challenging the industry's late-fee practices.
If the courts rule that cable operators must slash their
late fees -- or if there are more consumer complaints -- then the city can address the
issue in a special ordinance or when the operator's cable franchise comes up for
renewal in 2001, Crawford added.
"We didn't feel like we needed to be on the
cutting, bleeding edge of this issue right now," Crawford said.
AT&T will collect the fee from subscribers who fail to
pay up within seven to10 days of the printed date on the bill. Under its existing
franchise, the operator could not take action until the 15th of the following
"And then it was the ultimate penalty:
disconnection," Crawford said.
System general manager Kathleen McMullen said the fee would
be assessed only when the next month's billing cycle begins and the previous
month's bill has not been paid.
"Obviously, some people will not he happy about being
assessed a late fee," McMullen said. "But the rationale is that only people who
have not paid their bills will be charged the fee."
In convincing the city council, AT&T argued that the
existing policy resulted in a disproportionate number of disconnects each month. It also
forced work crews to disconnect, then reconnect subscribers, and meant more time was spent
calling delinquent subscribers or fielding complaints from customers whose service had
been turned off.
"You can also argue that you're doing the
subscriber a favor by charging them a $5 late fee," McMullen said. "It's a
wakeup call to them, because you're saving them the cost of a reconnection fee, which
right now is $18.75."
It's unlikely a late fee would prompt many of AT&T
Broadband's 22,000 local subscribers to disconnect, though.
Working in its favor is the universal need for its service
in Dubuque, which sits on the Mississippi River across from Wisconsin and Illinois. With
the city situated between a series of steep hills and bluffs that make
broadcast-television reception virtually impossible, cable has achieved a
higher-than-usual penetration rate among area households, Crawford said.