Local regulators are not happy about a trend they’re seeing: MSOs imposing a “digital gateway” charge assessed to customers who want to buy basic cable without an expanded tier, plus a premium service.
Officials said the practice has surfaced with other operators — not just in Connecticut, where 10 towns, led by Enfield, assert that Cox Communications Inc. is violating the tier buy-through prohibition of the federal Cable Act.
In Cox’s Connecticut systems, customers who want a premium channel such as HBO, along with their basic service, are charged to rent a digital converter and must also pay $3.95 for a “gateway” tier including digital music and an interactive program guide.
The Connecticut towns recently filed a complaint with the Federal Communications Commission regarding the tier.
The issue has also surfaced in a rate challenge made by a cluster of Texas communities, including Farmer’s Branch, Texas, served by Comcast Corp. Officials said the rate challenge includes multiple issues, not just the gateway charge.
Libby Beaty, executive director of the National Association of Telecommunications Officers and Advisors, filed comments in the Farmer’s Branch complaint, but added she doesn’t know if her association will take further action. She added: “I think we need some rules. I don’t think the FCC has properly addressed this issue. We’ll see if they choose to do so.”
Access charges, referred to variously as “digital access” and “digital additional outlet” charges, do not appear consistent with current rules, she said.
“This is not an issue that’s going to go away,” added Dick Treich, CEO of Front Range Consulting Inc. If the FCC does not address it, local officials may, using city-specific consumer protection ordinances, he stated.
Mentor, Ohio, an Adelphia Communications Corp. territory, has also filed a FCC rate complaint challenging such access charges, Treich said. Officials in Georgia note that Mediacom Communications Corp. has begun to assess a charge for a piece of equipment called a “digital link,” the rental of which includes music and the IPG.
But the equipment is not on the operator’s list of equipment subject to basic-rate regulation, so franchisers will be treating the charge as an unreasonable rate, subject to refund orders.