New Jersey Studies Cap on Late Fees

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If the New Jersey Board of Public Utilities has its way,
subscribers in 57 of the state's 81 cable systems will see their late charges
decreased.

The board has proposed late-fee caps of $3, or 6 percent of
the late account -- whichever is lower. Accounts must be 30 days overdue to be considered
late.

The utilities board is not reacting to a rash of consumer
complaints -- there haven't been many, said Brett Hall, its director of public
communications. Instead, the proposal grew out of a study that showed that some cable
operators, which Hall did not name, charge as much as $10 for a delinquent bill.

A late-fee cap would affect MSOs with extensive operations
in the state, including Comcast Corp., Adelphia Communications Corp. and Cablevision
Systems Corp.

Ray Perkins, an attorney for the New Jersey
Telecommunications Association, said operators were able to turn away previous efforts to
impose caps with independent studies that showed that the price of servicing overdue
accounts exceeded the cap amounts that were previously suggested. In the past, regulators
have suggested caps of $2.50 and 32 cents -- "Yes, the price of a postage
stamp," Perkins said ruefully.

Operators believe that interest in the issue peaked again
because of coverage of disputes in other locales.

Class-action lawsuits challenging fee amounts and trigger
dates in both Baltimore and Washington, D.C., won large judgments for consumers. The cases
caused many regulators to ask local operators to justify their charges, and they recently
led to a negotiated rate rollback by operators in Chicago.

New Jersey has no cap on fees, Perkins said. The cable
association will meet informally with the state utilities board to press its arguments.

Caps that are too low spread administrative costs unfairly
to customers who pay on time, Perkins said. Also, some current late fees serve as a
"disciplinary tool," to convince consumers to pay on time the next month, he
added.

"Customers can control late fees by paying on time.
Caps only protect the deadbeats, and that's not fair," he said.

The state board's proposal is subject to hearings
conducted by the state Office of Administrative Law, Hall said. The earliest date for a
vote on the proposal is September, he added.

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