Comcast deal may bring Louisville cable franchise back - WDRB 41 Louisville News

SUNDAY EDITION | Comcast deal may bring Louisville cable franchise back into focus

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LOUISVILLE, Ky. (WDRB) -- How satisfied are you with your cable service?

In late 2012, Louisville Metro government paid a consultant $65,516 to survey Jefferson County residents on that and many other issues related to Metro's franchise with Insight Communications / Time Warner Cable.

The "needs assessment" was commissioned as a starting point for negotiating a new long-term franchise agreement, which imposes conditions on the cable operator in exchange for access to the city's rights of way.

The consultant found three out of four Insight / Time Warner subscribers were "satisfied" with the service, but there are still issues to address like how long it takes a customer service representative to answer a call and how changes to rates and programming are communicated.

Yet, more than a year later, there's been no apparent movement by either the city or Time Warner Cable to update the franchise, which was last negotiated in 1998 and has been extended on an interim basis since its initial expiration in 2010.

Now, with Time Warner Cable slated to be acquired by Comcast Corp. for $45 billion, the languishing franchise is likely to come under scrutiny again later this year because Metro government has the power to approve the transfer of the franchise.

Metro Council President Jim King said the council could start dealing with the franchise issue as soon as this summer, but he noted the Comcast-Time Warner deal has several regulatory hurdles to pass before it's finalized.

King said it's "premature" to talk about what Louisville should ask for in a new franchise agreement, but he would at least like to see a smoother transition to Comcast than customers experienced when Insight was taken over by Time Warner Cable.

"It's my hope that when we go to the Comcast platform that we don't go through the same level of pain for the subscribers," King said, noting that many customers had to change long-held email addresses provided as part of their Internet service.

But even the pending transfer from Time Warner Cable to Comcast doesn't necessarily mean a new, long-term cable deal will be negotiated this year, said Pat Mulvihill, Mayor Greg Fischer's general counsel and point person on negotiations.

Under state law, the 1998 franchise deal can be extended until 2018, he said.

Asked why Metro government doesn't appear to be pushing for a new franchise, Fischer spokesman Chris Poynter said: "These types of deals are very complicated and often take years to negotiate… And now with another merger on the table, things sort of go into idle as you try figure out where things are headed."

For its part, Time Warner Cable "continue(s) to work with the city to reach an agreement to renew our franchise," TWC spokesman Mike Pedelty said in an email. "And later this year, we will pursue any regulatory approvals that may be necessary for transferring control of the franchise to Comcast."

A Comcast spokesman did not respond to a request for comment on Friday.

Concessions?

In February 2012, Metro government got a $3.5 million payment from Insight to keep the old cable franchise valid so that the $3 billion sale from Insight to Time Warner Cable could go through.

Fischer used the money to close a budget gap.

It's unclear whether Metro government would demand another one-time payment in connection with the transfer to Comcast. "Every franchise agreement is different. We were negotiating with a different company back then," Poynter said.

Metro Councilman Kevin Kramer, who chairs the Republican caucus, said Metro should try to get Comcast to provide services that are more related to the "normal course of their business" – like Internet links in public schools, Wi-Fi in public parks or subsidized Internet access for low-income residents.

Mulvihill cautioned that Metro government has no power over some of the issues that consumers might care about most.

For example, because of federal law, the city doesn't have any control over the cost of television service, he said.

The cost of cable was the only aspect of the service in which a majority of subscribers (56 percent) were not satisfied, according to the Metro government survey, which was conducted in December 2012 and January 2013 as part of the "needs assessment."

The 442 Insight / Time Warner Cable customers who responded to the survey said their average cable bill was $125 a month, though it's hard to isolate the cost of TV amid bundles that also include Internet and phone service, the consultant noted.

In its annual report to investors, Time Warner Cable said it received average revenue of $75 per TV subscriber and $44 per Internet subscriber in 2013.

Federal law also prevents Metro government from regulating anything to do with Internet service, Mulvihill said.

The franchise issues come as Fischer's administration is openly seeking vendors to install gigabit-speed Internet connections by wiring homes and businesses with fiber – just as Google is doing in a handful of areas like Kansas City.

Ted Smith, director of the Louisville Metro Department of Economic Growth and Innovation, said he thinks "incumbent" providers like Time Warner Cable and Comcast understand the desire of Louisville and other cities for faster Internet connections. There is no need to use the franchise process to get them to consider making upgrades, he said.

"I don't think it's going to require a lot of suggesting. I think it's a matter of the specific solution – the scope, the cost," Smith said.

One former Time Warner Cable customer, Louisville freelance writer Michelle Jones, said it's unfortunate the city cannot force the cable company to consistently provide its advertised Internet speeds, such as the 20 megabits per second service she had until switching to AT&T U-Verse in December.

Jones said she and her wife used to also subscribe to television through Time Warner Cable, but they dropped it after the total bill "magically" jumped from about $150 to $185 per month.

"We didn't change anything, the price just went up," she said, complaining of "opaque" bills that are difficult to understand.

The needs assessment said Insight / Time Warner Cable needs to improve "both the means and the message" when letting subscribers know of changes to rates and programming.

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