City Council OKs Comcast price hike

September 28, 2010

By Warren Kagarise

The updated agreement between the city and Comcast allows the cable provider to raise prices and removes many of the provisions the city had in place to maintain some of the best cable prices in the state for decades.

Comcast announced plans in early September to raise prices for Issaquah customers Oct. 1. The decision prompted grumbling from the City Council, but, in the end, members said the city had little choice but to sign off on the agreement.

The agreement reached the council Sept. 20, after almost three years of negotiations between Comcast and the city Cable TV Commission, the adviser to the council on telecommunications issues.

“Comcast has acted presumptuously in this process and has refused at every turn to provide us with favorable terms,” Councilman Joshua Schaer said. “This is by no means the fault of our outstanding cable commission, who has worked hard to negotiate in good faith and secure every advantage.”

The council OK’d the 10-year agreement in a 5-2 decision. Schaer and Councilwoman Maureen McCarry dissented.

Council President John Traeger lauded the city Cable TV Commission and rebuked the cable provider.

“Unfortunately, Comcast has all of the cards in this case, and they have put us in an untenable position,” he said.

The updated agreement reflects a push by Comcast to set uniform prices for communities in the Puget Sound region.

“The goal is, they’re not going to increase any higher than what the citizens in Bellevue are paying or the people in Seattle are paying,” Councilman Mark Mullet said. “The goal from Comcast is to try to make everyone in the whole region pay the same. Right now we are paying less than everybody else.”

Issaquah long had “most-favored nation” status — a provision to keep cable prices in the city at bargain levels, despite price hikes across the region. The practice of “most-favored nation” agreements has been phased out since the last franchise negotiations in 1998. The previous agreement between the city and Comcast expired in June 2008.

“Nobody is getting the kind of deep price discounts that we saw in Issaquah for a long period of time,” Comcast spokesman Walter Neary said after the council decision.

In addition to the cable negotiations, the Cable TV Commission updated city code to prepare for the updated agreement. The council approved the regulations in a separate decision Sept. 20.

Comcast — the predominate cable provider in the city — intends to raise prices Oct. 1 for most Issaquah customers from $12.08 for the limited cable starter package to $13.22. The digital starter package increases from $37.52 to $39.99.

Limited leverage

The agreement also reduces prices in South Cove and nearby neighborhoods. Though customers in South Cove and other southwestern neighborhoods long had Comcast service, a separate company operating under the Comcast brand served the area. Issaquah annexed the neighborhoods in 2006, but customers there continued to pay higher prices for cable.

The arrangement generated a class-action lawsuit from South Cove residents in 2007. The residents lost the case, appealed, lost the appeal and then dropped the case.

The updated agreement offers some relief to southwestern Issaquah customers: The limited cable starter package is due to dip from $14.40 to $13.22. The price for the digital starter package decreases from $57.45 to $39.99.

Schaer chided the cable giant for announcing the planned price changes before the agreement reached the council.

“Comcast has acted presumptuously in this process and has refused at every turn to provide us with favorable terms,” he said. “This is by no means the fault of our outstanding cable commission, who has worked hard to negotiate in good faith and secure every advantage.”

But the cable provider stressed the need for consistency in areas served by Comcast.

“Even if the franchise had not been approved this month, we would have gone ahead because consistency makes some sense,” Neary said. “It’s appropriate for people in Issaquah covered by the same regulatory franchise to be paying the same amount.”

Joe Forkner, a former councilman and a longtime Cable TV Commission member, said the city had limited leverage in the latest cable negotiations. Comcast declined to add clause outlining a timetable for price increases.

The city considered a court challenge built around the South Cove issue, but city leaders had concerns about the cost.

“We went to the administration and said, ‘We’ve got a 50-50 chance here. We think we’ve got a good shot, better than 50-50, but ultimately we can’t say we do, and it could go all the way to the Supreme Court, which means it could be millions of dollars,’” Forkner recalled. “They said, ‘There just isn’t any way we can do that financially.’”

Forkner said the city offered to Comcast to take the issue to court to allow a judge to decide and to establish precedent. Comcast declined the offer.

“If we could have afforded to go to court and pushed that issue, and they were to have lost, we could have said, ‘OK, as part of the settlement, we’re willing to take 10 more years of most-favored nations,” he said.

Warren Kagarise: 392-6434, ext. 234, or wkagarise@isspress.com. Comment at www.issaquahpress.com.

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Comments

One Response to “City Council OKs Comcast price hike”

  1. bryan weinstein on October 1st, 2010 10:54 am

    why comcast has a monopoly on cable and broadband in the city seems ambiguous – what has the cable commission and the council done to encourage low prices through competition? if comcast is so expensive and will not work with with city – why not force them out in favor of a company who would be more friendly with issaquah residents? is that what our city council should be doing?

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