The Federal Communications Commission has upheld a ruling ordering Comcast to stop charging its customers for cable equipment under the guise of service fees.
The FCC denied an appeal by Comcast, which argued that its practice of charging customers separately for a DTA (digital terminal adapter) — a converter box that allows cable subscribers with older televisions to receive digital channels, which the company said would be provided at no charge — is not subject to rate regulation, because it is a service fee. The ruling was issued on March 19.
After subscribers complained, four Twin Cities suburban cable franchising authorities issued rate orders "requiring Comcast to unbundle the equipment from three different so-called 'service fees,' " said Woodbury attorney Michael Bradley, whose law firm, Bradley & Guzzetta, represented the cable commissions.
The commissions are: North Metro Telecommunications, North Suburban Communications, Ramsey/Washington Counties Suburban Cable and South Washington County Telecommunications.
Municipal cable officials last year called on Comcast, the Twin Cities' largest cable provider, to be more transparent in its billing practices, Bradley said.
The FCC agreed, ruling that the cable giant is "required to establish separate equipment and programming rates when setting initial regulated rates, by first unbundling (or separating) equipment costs from total regulated revenues."
In an e-mail last week to the Star Tribune, Comcast vice president of corporate affairs Mary Beth Schubert said the case "involved a relatively minor dispute about the way certain items are presented on the rate card but has no effect on overall pricing."
But, Bradley argued the FCC's decision sets a strong precedent for transparency within the cable industry.
"They were lumping the equipment and the so-called service fees all together," he said. "And what's important about the ruling is that now the FCC has very clearly told Comcast and all cable companies across the country that it can no longer do that."