November 30, 2004

Probe is Coming of Comcast’s Braintree Dealings; Braintree Light Says Comcast is Trying to Lure Away Customers

The Patriot Ledger

BRAINTREE - The state Department of Telecommunications and Energy said it intends to investigate Comcast Corp.'s business practices in Braintree after the town complained that the cable giant is violating antitrust laws.

The Braintree Electric Light Department, commonly known as BELD, which runs a cable system in competition with Comcast, says Comcast is unfairly trying to lure away the department's broadband customers with steep, long-term discounts that amount to discriminatory pricing. It alleges that Philadelphia-based Comcast has led a systematic campaign of sabotage for months, having its field technicians dismantle and disable the department's broadband equipment whenever a customer decides to switch to Comcast and cutting the wiring of those customers in such a way as to make it impossible for them to switch back. It also alleges that Comcast has given incentives to local businesses - notably Circuit City in Braintree - if they discourage people from signing on with BELD broadband.

Tim Shevlin, executive director of the Department of Telecommunications and Energy, said yesterday that this is the first time a municipal electric light department has brought such charges at the state level.

"We have received these complaints and we are investigating them and beyond that, as with all pending legal matters, I cannot comment," Shevlin said.

The electric light department has also urged Attorney General Thomas F. Reilly to launch an investigation. Department officials expect to meet with Reilly's office on Dec. 8.

Comcast yesterday called the allegations unfounded. "Rather than compete head-to-head on products and customer service, BELD has chosen to make groundless and unsubstantiated allegations," spokeswoman Jennifer Khoury said in a statement.

The Braintree Electric Light Department, a municipal department, is a self-sustaining enterprise that cannot turn a profit. It is financed by ratepayers.

General manager William Bottiggi said that is why the department cannot compete in a price war with Comcast.

"I think they are only interested in making a profit," he said of Comcast.

There are 40 municipal electric light departments in Massachusetts, but few offer services beyond supplying electricity.

In Braintree, the department added cable TV and Internet service to its electricity offering several years ago and has a broadband customer base of close to 5,000.

The rates it charges, Bottiggi said, are just enough for it to break even.

The feud between the electric light department and Comcast surfaced in July, when Bottiggi said he had learned that Circuit City employees were steering customers to Comcast, offering them discounts if they signed up in the store for the company's broadband service.

During the last month, Bottiggi maintains, Comcast has taken its campaign directly to the department's customers. Company representatives are going door to door trying to persuade customers to switch to Comcast for cable and Internet service, he said, adding that its promotional rates are as much as 50 percent lower than its normal rates and 20 percent less than the electric light department's rates, and stay at that level for 16 months. The same deal is not available to Comcast residents in neighboring towns, Bottiggi said, and has not been offered to existing Comcast customers in Braintree.

The electric light department has lost 150 customers since last month, Bottiggi said.

"We're saying that they are discriminating against consumers to the short-term benefit of Braintree residents, only BELD customers," Bottiggi said.

Comcast would not comment specifically on its marketing strategy or promotions.

Khoury said: "In this competitive environment, where consumers can choose between numerous cable and satellite providers, Comcast believes in the superiority of our products and service, and that is what we market to all consumers."

Comcast is easily the dominant cable provider in Massachusetts, with 76 percent of the market share and 1.6 million customers, according to the Department of Telecommunications and Energy.

The department regulates the rates of Comcast and the nine other cable providers operating in Massachusetts, including the Braintree Electric Light Department, and prohibits a provider from charging different rates to different customers. Typically, a Comcast customer in Weymouth has to pay the same as one in Quincy. The department does not regulate rates that are part of a short-term promotion.

Shevlin, the Department of Telecommunications and Energy executive director, said he did not know how long an investigation of Comcast would take, and whether it would involve hearings.

Braintree selectmen, who control Comcast's license to sell cable in town, are also jumping into the fray. This week, they voted to send Comcast a letter requesting the cable operator to appear before the board in the coming weeks and answer to the allegations.

"I think if any company, BELD or Comcast, were engaging in activities that were unfair and considered monopolistic, we have more than a right to investigate and take whatever action is needed," Selectman Chairman Charles Kokoros said.

Jeffrey White may be reached at [email protected]