Posted by madcityradio.com on November 05, 2008 at 14:23:51:
FCC to probe pricing policies, channel moves of major cable firms, Verizon
The Federal Communications Commission has opened an investigation into the pricing policies and channel moves of major cable operators - including Charter Communications - and Verizon Communications Inc.
The agency wants to ensure the companies' customers are getting treated fairly, FCC Chairman Kevin Martin said in an interview with The Associated Press.
"I'm certainly concerned with the increasing cable prices that consumers are facing," Martin said. "They are getting less and being charged the same or more."
The FCC wrote on Oct. 30 to cable operators including Comcast Corp., Time Warner Cable Inc., Cox Communications Inc., Charter Communications Inc., Cablevision Systems Corp., Bright House Networks, Suddenlink Communications, Bend Cable Communications, GCI Company, Harron Entertainment and RCN Corp. Verizon, which offers pay-TV services with FiOS, also was included in the probe.
The agency's letter questioned the companies' practice of moving analog channels into digital tiers to free up bandwidth for other uses, such as high-definition channels. Analog customers will have to get a digital set-top box from the operator or buy the digital TV tier to watch the channels that are moved.
The agency also will look into whether cable operators and Verizon are confusing customers by linking the shift of the analog channel to the digital tier to the nation's transition from analog to digital broadcast TV, Martin said.
The two moves are unrelated.
Linking the two in customers' minds could prompt more people to opt for digital video and cable services because the February digital broadcast TV transition is mandated by the federal government. The FCC has asked companies being probed to submit information about their pricing practices within two weeks.
Martin said it appears consumers weren't given "appropriate notice" about the channel changes.
He said the FCC has received a "significant" number of consumer complaints about the practice of moving analog channels to digital, which has accelerated this year.
Charter spokeswoman Anita Lamont said in an e-mail that the company was crafting a response to the FCC.
Comcast spokeswoman Sena Fitzmaurice said the company has started offering a free digital set-top box and up to two digital adapters to "enhanced basic" customers. The adapters convert digital signals to analog.
David Young, vice president of federal regulatory affairs at Verizon, said FiOS is all-digital but it had been simulcasting in analog so customers could watch TV on analog sets in other rooms that don't have set-top boxes. Verizon stopped the analog transmissions last month.
"We told customers repeatedly that this was coming. We asked them to contact us. We told them about their options, including offering them the digital adapter for that TV for free," Young said.
The FCC's letter was sent out a day after Consumers Union sent a letter to the Senate Committee on Commerce, Science and Transportation asking for an investigation into the practice of moving analog channels to the digital tier.
"Consumers are left paying the same monthly rate for significantly less service, or must rent more expensive set-top boxes for each television set they own," said Consumers Union, a nonprofit advocacy group.
Earlier this year Madison area cable provider Charter backed down on a plan to move public, education and government (PEG) channels - such as Madison City Channel - from analog to digital after running into resistance.
In a compromise, Charter moved the PEG channels to channels 95 through 99 on its basic analog service, as well as making them part of its new digital Public Affairs Neighborhood on channels 979 through 998.
In July, Charter announced that the channels would only be offered on a digital tier, although basic and Expanded Basic analog cable subscribers could access the channels with a recently purchased television that has a QAM tuner or with the rental of Charter's digital equipment.
Complaints about the cost of renting the equipment prompted Charter to maintain the PEG channels on analog television.
Charter said it made the moves to open up bandwidth to add more HD channels, which it has since done with some delays as the situation played itself out.
Brad Clark, station manager of the Madison City Channel, at the time called the announcement a "step in the right direction" for Charter. But he expressed concerns that the PEG channels may have to relocate twice if Charter chooses to drop them from the analog lineup in the future, which would pose marketing issues for the channels.
"What I want to be clear about is that they're going to continue to offer us on analog until such time, whenever this happens, that they move their entire service over to digital, which includes the local network affiliate channels," he told The Capital Times.
Charter also said earlier this year that it has no plans to abandon analog and move to all digital.
(Jeff Richgels, The Capital Times)
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