Mega hurts

It’s Super Bowl Sunday at Detroit’s Manoogian Mansion.

Guests are invited to watch the game; food and drinks are plentiful. Suddenly, with a “crackle, crackle, pop,” the cable goes out.

It’s not an unfamiliar occurrence. But when it’s Dennis Archer throwing the party, the outage is fixed — quickly.

“Somebody called and, miraculously, a truck appeared. We didn’t miss a beat,” recalls the former mayor. “But it could have been embarrassing.”

There are plenty of people who insist that Comcast Cable Communications’ service in Detroit is an embarrassment.

City officials say that Comcast — self-proclaimed as the most profitable cable company anywhere and poised to become the nation’s largest-ever cable purveyor — provides horrendous customer service and antiquated technology in Detroit, while arrogantly rebuffing attempts to improve the situation. Comcast vehemently denies the claims.

The cable giant enjoys a monopoly in Detroit, thanks to a city ordinance that requires any cable provider to service the entire 130-plus square miles of the city. This stipulation, designed to ensure service to poorer neighborhoods, has quashed competition and, critics contend, ensures poor service to all.

While Comcast takes robust operating profits — an estimated 36 percent margin in 2001 — out of Detroit, the city’s Cable Communications Commission charges that the firm has repeatedly violated its franchise agreement to do business in the city and refuses to divulge information about its systems.

Comcast’s franchise agreement, incidentally, expired in June 2000.

Cable commissioners primarily are concerned that Detroit is getting shafted on technology, with less bandwidth than is found in the suburbs and other cities nationwide.

But Archer, whose term concluded Dec. 31, says the problems weren’t serious enough for the city to try to stimulate competition or to consider ousting Comcast.

“There was no reason to reach out and try to create competition,” Archer tells Metro Times.

Competition and improving service is, however, a great desire of many others, including city officials and customers who consistently lodge complaints about Comcast.

Comcast reports it spent $75 million to upgrade Detroit’s technology and customer service in the past two years. Yet a record number of complaints about the company were filed with the city in 2001, up 40 percent from 2000.

Detroiter Mary Jo Axson got so frustrated with Comcast’s customer service that she called the corporation’s president, Brian Roberts, in Philadelphia to demand better.

“Basically, I’ve been through hell the last three weeks,” Axson says. “They came out to hook up cable and Internet, and nothing worked … They weren’t very nice. They didn’t even have the numbers to headquarters in Pennsylvania. I had to call information. I talked to someone there, and I thought they were going to fix it. It’s not fixed at all.

“I’ve spent hours on the phone every day.”

For better or for worse, cable TV has become a fixture.

In the Motor City, where Comcast serves about 125,000 households, surveys show each home has an average of 3.4 TV sets, compared to an average of two nationwide. Polls indicate that four of 10 Comcast cable subscribers watch between three and seven hours of TV each day, while 21 percent stare at the tube more than seven hours a day. Comcast reports that more Detroiters buy high-end services than in nearly any other American city. When problems arise with an expensive service used for hours a day, people become very unhappy.

But the issue transcends couch potatoes. Patricia Aufderheide, communications professor at American University, says Detroit should make its new franchise agreement with Comcast a top priority.

“You should be looking upon cable as a service that gives a democratic society vital information streams, both passive and interactive,” she says. “It’s not just your television. It’s your television and your Internet. It’s not a frill in our lives anymore. It’s a basic service, and it should be treated as seriously as other information services.

“When cable wants favors from Congress, they say ‘We’re really important to people’s daily lives.’ When they don’t want to be regulated, they say, ‘We’re just a frill.’”

Archer says in his eight years he saw no need to “rattle sabers” over Comcast’s performance.

Comcast spokesman Bill Black says he doesn’t think a new franchise agreement will be a high priority for Archer’s successor, Kwame Kilpatrick. Kilpatrick was not available for comment.

Such blithe indifference at the top might explain why those on the front lines of an ongoing cold war against Comcast see little progress.

“There’s a ‘That’s good enough for Detroit’ attitude,” says Kamal Amen-Ra, the Cable Commission’s executive director. “This is the city of Detroit. All we’re saying is we want to be state of the art … Because of their lack of cooperation, we have to go through this lack of service.”

Without competition, city officials feel they have little leverage.

“In a way,” Amen-Ra says, “they have us.”

Actually, the city could call the shots if it chose to. Comcast operates in Detroit at the pleasure of city government, not the other way around.

The few, the proud

In the days before Christmas, Comcast’s office on Detroit’s west side gleams with festive decorations. Employees socialize in giddy anticipation of the holiday vacation.

Comcast’s regional vice president, George Booth, beams with pride.

“Our employees used to cover their badges in the grocery store,” Booth says. “That doesn’t happen anymore. Our employees are proud to work for Comcast, and they can hold their heads high.”

Some of those employees — union members, especially — aren’t so gung-ho.

“The citizens are being truly shafted,” says Stella Howard, president of Local 4100 of the Communications Workers of America. “The service is deplorable. And the workers are treated badly.”

A Metro Times review of documents shows that complaints about Comcast to the city peaked at a three-year high in 2001. Outages, fuzzy reception, an impenetrable phone system, botched installations and a phantom pay-per-view boxing match were among the biggest gripes. Many were repeat calls, and some complaints went unresolved for months.

The Cable Commission, appointed by the mayor and City Council to oversee cable operations, fielded an average of 215 calls a month in 2000; in 2001, through November, the average leaped to 307 per month, with a greater percentage of repeat complaints.

But customer service is hardly the only problem. In a matter taken up by the Federal Communications Commission, Detroit claims that in 1998 and 1999, Comcast drew a higher profit from equipment charges than the national standard and overcharged for service calls by as much as $17 an hour. The FCC ruled in favor of Detroit, and city consultants estimate Comcast owes Detroit customers more than $3 million in refunds, not including refunds for maintenance overcharges.

Comcast disagrees. Jon Kreucher, Comcast vice president of regulatory affairs, says his company owes considerably less than what the city claims, though he won’t give a figure. Lawyers continue to negotiate the matter.

“The difficulty we’re having with Comcast is we don’t have any figures from them. Any time you have negotiations, you need to have the positions of both sides so you can negotiate,” says Garth Ashpaugh, a Florida accountant who handles rate regulation issues for Detroit.

“I don’t think that Comcast has acknowledged at this point that refunds are required.”

Kreucher says the matter is “an honest difference in interpretation.”

“We think we should be able to charge $28 an hour to have a trained technician go out with a truck and repair cable in your home,” Kreucher said. “What Garth and the city wanted is for us to charge $18. I can’t even get a plumber or electrician or person to mow my lawn for less than $28.”

Broadband wagon

In the past 15 months, the Cable Commission issued three separate notices claiming Comcast violated its contract with the city. It issued other notices detailing customer complaints and demanding financial and technical information.

Two of the so-called notices of default were prompted by the city’s concern that Detroit’s system is substandard, wired at a bandwidth of 610 megahertz (MHz) while the city’s suburbs and most large U.S. cities have a bandwidth capacity of 750 MHz or greater.

Bandwidth, or the ability of the cable wire to deliver television, Internet and other signals to homes in Detroit, is measured in megahertz. The larger the number, the greater the capacity and the more channels and services the wire can carry. Fuzzy reception, outages and slow Internet service can be caused by insufficient bandwidth.

Cable Commission officials say their documents indicate Detroit’s system is wired at only 550 MHz. They want to see evidence that Comcast has upgraded to 610 MHz. Comcast hasn’t provided the information needed to assess the system, saying that only the FCC can regulate technical issues and that federal rules prevent local government from such oversight, according to Kreucher.

But the franchise agreement gives the city the power to oversee the quality of the system.

“We’re not asking for trade secrets,” says James Beasley, who chairs the Cable Commission. “They’re acting like we want maps to the Pentagon. We want to make sure that Detroit is on par with the rest of the country. We want to have the best.”

Comcast regional manager Booth says he hopes to work with the commission “to get a better understanding of what they are looking for and how it relates to what customers want.”

The Detroit system offers “every service available to customers on a 750 MHz pipe,” Booth says.

Comcast spokesman Black says that Detroit’s system offers advanced services such as digital TV and high-speed Internet. Black says in the digital age, MHz are “irrelevant,” because channels and signals can be digitally compressed, allowing more signals to fit on less bandwidth.

“This hang-up with megahertz is overblown,” he says. “Megahertz just doesn’t matter anymore. For anyone to try and suggest we haven’t devoted as much to the Detroit system, that’s absolutely untrue. Because it’s newly upgraded, it’s actually newer … We’re constantly upgrading equipment.”

Michigan State University communications professor Thomas Baldwin says bandwidth capacity affects the number of analog, or nondigital, channels a system can carry.

“In a 750-MHz system, the customers with analog are likely to have more channels,” he says, because of the bigger bandwidth. “In a 550-MHz system, they take away the analog to run the digital channels.”

Paula Gentius-Harris, the Cable Commission’s contract compliance manager, says that’s exactly what happened in Detroit — channels such as the Christian Television Network were moved last year from analog to digital, meaning only digital subscribers get the service.

In other cities served by Comcast — such as Livonia, Southfield and Oak Park — the bandwidth is 750 MHz. In Albuquerque, N.M., served solely by Comcast, the new system is 860 MHz.

“When you see stuff like that, you start to wonder,” says Gentius-Harris. “Why do they have 750 or 860 and we have 550? We’re just a little different here, in terms of the physical system itself, and we’re trying to determine why. Is it economic or social? We’re still investigating.”

Cable Commission studies show the company’s local broadcast facilities are subpar at best, though Booth says a new facility is slated for construction in downtown Detroit in 2003.

The confrontational relationship between the city and the cable giant is aggravating negotiations to strike a new franchise agreement. City Council has extended the contract three times. Cable Commission officials want any new deal to require technology upgrades throughout the city, customer service guarantees and other improvements.

The city sent a proposal to Comcast in May, but has yet to hear back from the company, Archer says.

Beasley, a member of the team negotiating with Comcast, says the company has been arrogant and “recalcitrant” in addressing problems.

The city has the power to buy Comcast’s system if no agreement can be reached, though the process would likely entail a long and expensive legal battle. Some cable cognoscenti believe the city should create its own system (see accompanying story).

Some tout Comcast’s importance as a corporate donor, while others say the company could do much more. In 2001, Comcast awarded $36,000 in scholarships to Detroit students and gave $175,000 worth of new musical instruments to public schools. Each year, the company donates more than $1 million to community organizations and spends more than $2 million with Detroit-based women- and minority-owned businesses, Comcast reports.

But cable commissioners and staff say reduced rates for seniors, enhanced service to schools and public facilities and many other issues need to be addressed. The devil’s in the details of the franchise agreement, yet to be forged.

“The only option for us is to make the franchise agreement better,” says Amen-Ra. “It’s all or nothing here. We need to make the cable company more accountable.”

If Comcast feels any pressure, it doesn’t show.

Black notes, “You didn’t hear Archer say anything about the franchise agreement not getting done.”

“Franchise renewals are not a high priority for any municipality. In the big scheme of things, it’s just not a priority, especially today.”

Apparently, it’s not a priority for Comcast, either.

Humble beginnings

Comcast bought Detroit’s cable system from local entrepreneur Don Barden for $250 million in 1994. With it, the corporation assumed Barden’s contract to do business in Detroit. The contract expired in June 2000.

Comcast’s Detroit acquisition was part of a nationwide buying spree that made Comcast the country’s third-largest cable provider.

Black says the Detroit metro area is “a very important market for us,” as the corporation’s second-largest market behind Philadelphia.

But Comcast’s pending merger with AT&T Broadband will give the new company, AT&T Comcast Corporation, 22 million subscribers nationwide and a major presence in 17 of the nation’s 20 largest markets. When the deal closes, AT&T Comcast will be America’s largest cable provider.

Comcast was founded in 1963 as a small television station in Tupelo, Miss., by Ralph J. Roberts, chairman of Comcast Corporation, and has been managed aggressively since then by Roberts and his son, Comcast president Brian Roberts.

The corporation’s growth has been buoyed by strong investor relations. During the bid to take over AT&T Broadband, the Robertses boasted that they collect the highest operating profit in the industry at 40 percent, compared with an 18 percent operating profit by AT&T’s cable operations in early 2001.

In 2000, the corporation generated revenue of $8.2 billion.

That year, Detroit got $4.5 million in cable franchise fees, which the city touts as Comcast’s rent to do business in Detroit, even though the fees are paid directly by cable subscribers on monthly bills. Some of the fees come from Comcast’s nonsubscriber income, but most come from subscribers, says city accountant Ashpaugh.

The franchise fee is 5 percent of Comcast’s gross.

In 2001, Booth says, the company generated $97 million in Detroit, and reported $35.5 million in “cash flow,” or pretax operating profit.

The Cable Commission plans to audit the corporation to “double-check” the figures, says Amen-Ra.

The gravy train

Nationwide, cable competition is rare.

“Merger mania is very much at play in the cable industry,” says City Councilman Ken Cockrel. “I think you’ve got, at best, three or four cable providers operating in the country. There’s just not a whole lot of folks out there, really, to compete with these guys.”

Detroit’s agreement with Comcast is nonexclusive, which means that anyone could bid to provide competition here — if they wanted to lay their own wires.

In Warren, officials were inundated with complaints about Comcast and jumped at the chance three years ago to allow Ameritech to build a cable system, says Dennis Champine, spokesman for the city of 140,000.

“Since then, the number of complaints we have received has dropped dramatically,” Champine says.

As for prices and actual service, Champine says Comcast and Ameritech are about the same. But other things have improved with competition, he says.

“We wanted to bring competition in to force Comcast to clean up their act. And clean up their act they did. They actually have a customer center in Warren now … Certainly, the competition makes a difference in the customer service arena.”

Ameritech considered building a cable system in Detroit in 1995. But with the law requiring any operator to serve the entire city, Ameritech decided it would be too expensive, says Joe Izbrand, spokesman for SBC Communications of San Antonio, former parent company of Americast Cable.

“Frankly, when we looked at Detroit and looked at what it would take to operate there, it was really too great for our business plan,” Izbrand says. “The cost of doing business would simply be too high, because of city requirements and establishments.”

The main obstacle, he says, was wiring the entire city.

“That requires a huge investment over a brief period of time. It’s extremely expensive to build an entire city,” Izbrand says. “It very risky, because you’re coming in and hoping you can get customers.”

Cable Commission officials say they, like City Council, have no plan to call for repeal of the requirement, put in place by Mayor Coleman Young in the ’80s when the city was trying to attract a cable provider.

“We have pretty much been true to the fundamental philosophy that if you want to come to town, you need to provide services from edge to edge,” says commission chairman Beasley. “We can’t have a situation where the rich white neighborhoods have three companies to choose from, and the poorer neighborhoods are fiddling with their antennas.”

Nationwide, the kind of monopoly that exists in Detroit has led to skyrocketing prices. Since the Telecommunications Act of 1996, which paved the way for high concentration of service, rates have risen almost 36 percent, says Chris Murray, Internet and telecommunications counsel for the Consumer’s Union in Washington, D.C.

“The No. 1 complaint we hear is rates,” Murray says. “Cable companies say this is because programming is more expensive. But also, because they’re getting better programming and people are paying more, and they’re getting more eyeballs, they’re making more ad money. They raise consumer rates because they can. There’s nobody to discipline them.”

Shoot your TV

Rachel Freeman is a soft-spoken woman with a sweet smile and a soothing voice. She sits behind a glass pane on the 10th floor of the Marquette Building in downtown Detroit and takes calls from people who are upset with Comcast.

She gets 40 to 70 calls a day. As the customer service coordinator for the Cable Commission, Freeman tracks every complaint and sometimes makes house calls to ensure problems are solved. She says a major problem is sloppy installations that take far too long to get fixed.

“You wouldn’t believe the things we see,” Freeman says. “Damages of hitting power lines, damaging electrical lines, plaster falling from the walls, even holes in the wall. We’ve even seen fences broken that haven’t been fixed.”

Most calls Freeman gets are from people with repeat problems, she says. In general, people call the commission only after they are unsatisfied with Comcast’s response.

Freeman is a 14-year veteran of the television business, working for a satellite TV company and Barden Cable before joining the city staff. She doesn’t have much good to say of Comcast’s customer service.

“They’re not responding to emergency calls. They’ll hurry up and try to resolve the issue at the last minute. These issues need to be handled on a consistent basis so they don’t become an emergency,” Freeman says. “If a senior citizen has a problem, it should be fixed that same day. It seems to me that there’s no respect for the customer.”

Technical difficulties

Comcast regional vice president Booth seems surprised when told of the volume of complaints the Cable Commission is getting. Booth oversees Comcast service to 1 million customers in southeast Michigan and 125,000 households in Detroit, and says the company is service- oriented.

“Inadequate customer service cannot exist if we are to keep our customers and have others turn to us for broadband product delivery,” Booth says.

Comcast does acknowledge there was a time when it had customer service problems in Detroit. When Booth took his post in 1997, he says, existing outage and fuzzy reception issues were aggravated as Comcast installed fiber optic cable, increased the system’s bandwidth from 550 MHz to 610 MHz and replaced more than 140,000 outdated cable boxes.

Service got so bad that, in 1998 and 1999, Comcast response times fell below FCC minimum standards, and the commission cited Comcast for violating its franchise agreement. Comcast paid the city $200,000 in fines to settle the matter, says Patrick Miles, special legal counsel to the commission.

Since then, the company has aggressively worked to fix problems and improve service, Booth says.

“I’ve been here four years,” he says. “I came in here with a goal to assess the situation and roll out services. I think we’ve been extremely successful.

“Most important is the level of service we give to customers. We care what they feel.”

Booth says that in 2001, Comcast received 2.4 million calls and answered 98 percent of the calls within 30 seconds. That’s up from 95 percent in 2000. Those figures are reported monthly to the Cable Commission as required by the FCC, Booth says. The company isn’t required to track how much time it takes for a caller to be connected to an actual human, but simply how quickly the automated system picks up.

The company also says in 2000 and 2001, it had a 100 percent rating in responding to service interruptions within 24 hours, and that service appointments were kept within a four-hour period 97 percent of the time.

City officials are trying to determine why there’s a discrepancy between Comcast’s and the city’s complaint figures.

“It’s almost like we can’t believe what they say,” Gentius-Harris says.

Booth explains that the company wants to continue upgrading its system to entice more customers. While Comcast has no competition from any other cable provider in Detroit, the company serves only 37 percent of Detroit’s potential cable TV customers. About 50 percent of residents of the greater Detroit area are cable subscribers; nationwide, nearly 70 percent of households have cable television.

Detroit’s penetration rate is in line with other large urban areas, such as Los Angeles and Chicago.

Meanwhile, Booth estimates that there will soon be 50,000 satellite TV customers in Detroit, up from 10,000 in 1997. Figures show satellite service at about 12 percent of Detroit’s market, compared with 15 percent nationwide.

The low subscription rate in Detroit is attributed to many factors, including lower incomes, availability of free local broadcast channels and cable theft. Comcast estimates that as much as 14 percent of the Detroit market could be illegally receiving cable service. The thieves put a double whammy on the company — lost income and damaged lines.

“Your normal cable thief doesn’t use the best equipment available,” Booth says.

Union blues

The Communication Workers of America Local 4100 is at war with Comcast. Local 4100 President Howard is urging the city not to renew the franchise agreement with Comcast until the company agrees to improve relations with the union.

Union grievances include Comcast’s high reliance on subcontractors for maintenance work, a migration of jobs from the city to Comcast technical centers in the suburbs, and the employment of non-African-Americans to do city work. The union compiled a packet of information that outlines ways that union workers suffer under “arrogantly continuous violations of the union contract.”

Since a union contract was ratified in June, the local has filed more than 30 grievances against Comcast, Howard says.

“Before the city signs an agreement with Comcast, we want to see more language that talks about who they contract to, and more language to ensure that workers are being treated fairly,” Howard says, noting that Detroit is the only municipality in Michigan where Comcast has a union contract.

The union also claims that the company is providing substandard technology at higher prices than in the suburbs.

Bill Black, Comcast spokesman, counters, “Some of the things they say are total, blatant lies.”

He says, “most of the issues have not been issues with the employees. They’ve been issues brought by outsiders” and “people with an agenda.”

“I don’t think there are real workplace issues for our employees,” he says.

He also disputes union claims about substandard service in the city.

“There is no service provided outside the city that isn’t available inside the city,” Black said.

In addition, a Florida cable consultant, Michael Hunt, who did an extensive report on Detroit cable service, says that Comcast is actually providing more services in Detroit than are found in many communities nationwide.

Booth adds that of the 500 employees of the southeast Michigan operation, 85 percent are Detroit residents and 85 percent are African-American. Of the 350 employees in the Southfield call center, 60 percent are Detroit residents, he said. The customer service center will move to downtown Detroit by 2003, he adds.

Only 110 of Comcast’s employees, all technical workers, are unionized, he says.

“There might be changes in the CWA,” Booth says. “Generally, the stance we’re taking is that customers always have to come first. That’s what we preface everything on. We sometimes find bad behavior. When we can’t fix the bad behavior, we have to fire that person.

“If I have an individual, union or nonunion, and you’re not living up to our goal of satisfying the needs of the customer … you should be worried.”

Detroit Cable Commission officials share the union’s concern about substandard technology in Detroit. But a price comparison done by the commission, and another done by Hunt, found that Detroit prices are slightly higher, than the suburbs but below the national average for price per station.

Hunt did point out that Detroit is the only city he knows of that doesn’t have a limited, low-price basic tier as is found in many cities for around $12, and that Comcast told him they were implementing such a service. To this date, no such service exists in Detroit. Kreucher said that’s because federal regulations make it difficult to change packages, and because Comcast doesn’t see a great demand for such a plan.

Comcast’s basic tier package is $27, a price that hasn’t been raised in three years, Booth says.

But calls by the Metro Times to Comcast customer service indicated the lowest monthly price was $38. In three follow-up calls to confirm the discrepancy, the wait to speak to a customer service representative lasted more than 15 minutes and the matter went unresolved.

Booth says the representative who gave the $38 figure must have been mistaken, and that 8,000 customers in Detroit take the $27 per month package.

Hunt’s study pointed out that in North Charleston, S.C., where Comcast competes with two other cable companies, Comcast offered a limited service basic cable package for $4.76 a month.

Hunt’s study also noted that Detroiters who claim cable is too expensive might subscribe to such an inexpensive baseline package.

Hunt’s study, released in early 2001, makes reams of recommendations for ways the city could improve service by employing stricter standards on Comcast. The report stated that many problems would be fixed when the company upgrades bandwidth to 750 MHz, as officials told Hunt they would. That upgrade has yet to occur.

“I think there are legitimate concerns. The system was antiquated,” says Hunt. “I also think there has been an honest attempt to improve the service.”

In the past two years, Comcast has spent $75 million, or $600 per customer, to improve Detroit’s system, Booth says.

But commission executive director Amen-Ra says there are undeniable problems with the system as it exists.

“They’re trying to stick a 12-inch foot in a 6-inch shoe,” he says. “And it just isn’t going to work.

“All we’re saying is we want to be state of the art,” says Amen-Ra. “Comcast needs to upgrade. They keep telling us they are. But we know from the problems we have that they are not.

“We want what’s best for Detroit. We want Detroit to be wired for the future and future advances in technology.

“The number of subscribers, the number of complaints and the level of cooperation between the government and the company, those are the things that matter. And they’re bad. We want them to be better.

“We believe we can work with this company and make them a better corporate citizen than they are now,” said Amen-Ra.

Lisa M. Collins is a staff writer for Metro Times. E-mail comments to [email protected]
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