CABL Forum - Motels troubled by Comcast price hike

http://www.manchesterjournal.com/ci_13004680

MANCHESTER - A significant hike in the cost of cable service has some local hotel and motel owners up in arms.
Comcast Cable issued letters to hotel and motel owners in Manchester in June notifying them that effective July 1, their prices would be increasing. Kristen Roberts, a spokesperson for Comcast, said the company is negotiating with those hotel and motel owners throughout the state who did not have a contract to attempt to get an agreement in place.

In the cases of Linda Benway, Sal Asciutto, and Jennifer Amatruto, owners of the Casablanca Motel, Olympia Motor Lodge, and the Brittany Inn Motel respectively, their rates have doubled.

Benway said her rates have been raised to $20 per unit per month from the $10.12 per unit that she had been paying.

It puts the motel owners in the position of having to decide whether to absorb this additional cost, or try to recover it by passing it along to their customers.

According to the letter sent to her by Comcast, the $20 per unit price "represents a significant savings off our price for cable television service." Roberts said that those bulk customers who do not have a valid contract with Comcast could end up paying significantly more than the aforementioned rate.

"Customers who don't have a contract with us could potentially be charged the full retail rate of $60 on average," she said. "While we are highly focused on controlling our costs for the benefit of our customer's, price adjustments are a necessity

in view of the increased cost of doing business in this challenging economic environment, including health care costs, increases in the cost we pay for programming, and technology and service improvements,"
Roberts continued to say consumers, whether they had a contract or not, were still receiving a discount, but that the discount would be more substantial for those who entered into an agreement with Comcast.

The letter sent to Benway states that the company cannot guarantee a reduced rate and they reserved the right to discontinue bulk pricing if a service agreement with Comcast was not in place. It also stated that having a service agreement in place would secure a discounted price for a designated number of years.

According to the service agreement given to Benway, Asciutto and Amatruto, the service agreement is for a 10-year duration. Some of the property owners, including the aforementioned three, have misgivings about signing the contract because of the specified duration. "We're reluctant to consider signing it at this time because it seems like a heavy commitment," said Amatruto. "We're going to have to make a decision soon about it because $20 a month is a pretty high price to pay for it."

"I believe, according to them, the only way you can receive the discounted rate would be to sign a 10 year lock in agreement," said Asciutto. "We had an attorney look at it and they didn't feel that it was such a smart thing to do. Anyone you speak to is pretty much saying the same thing." Roberts disagreed.

"It's in their best interest to have a longer contract and have their price negotiated with Comcast. Customers who have a existing contract with us are being adjusted in line with the price increase language that's in their contract," she said.

According to Benway's service agreement, the company may increase the monthly service fees within 30 days of a written notice over the 10 year duration, but the fee increases could not exceed 5 percent per year. However, in a conversation with Roberts on Wednesday, she said that not all service agreements were the same.

In 2002, when Amatruto said she and her husband took over ownership of the Brittany Inn Motel, they were paying $5.28 per room through Adelphia Communications Company. Their rates had risen to $8 a room by 2006 when Comcast took over the company. Over the next two years, Amatruto said the cost per room rose $2.12 - increasing to $9.20 per room in 2007 and $10.12 in 2008.

Benway said the increased prices puts her and other hotel and motel owners in a precarious position because their guests expect the service to be provided.

Amatruto said that if they do decide to sign the contract with Comcast the additional cost would not be passed onto their consumers.

"It's difficult at this point to pass anything on to the consumer because the economy is so tight that the consumer is reluctant to pay for a room as it is and they're always looking for a bargain," she said. "They certainly don't want to pay any more for a room and they're always trying to see if they can get a deal for less, so I would say we'd have to just absorb the cost."

Amatruto continued to say that she and her husband had discussed the possibility of eliminating the service because it was not frequently used. However, she said if they were to do so it could lead to a decline in business because other hotels and motels would offer the service. Jay Hathaway, executive director of the Manchester and the Mountains Regional Chamber of Commerce - to which Comcast and the aforementioned property owners belong - indicated that it would be beneficial for both sides to reach a consensus.

"Clearly there is a need for continued discussion and negotiations among all affected parties," Hathaway said.

Executive Director of the Bennington Area Chamber of Commerce, Joann Erenhouse, said the issue has also arisen recently in Bennington. The issue was not raised when the chamber had their hospitality committee meeting last week, Erenhouse said, but when she talked to hospitality owners on Tuesday they confirmed they were seeing a substantial increase in prices.

"Apparently the Comcast lobbyists have gotten the FCC to abandon the regulatory oversight so there's no one controlling what they can or cannot charge or do. At least that's what I've been told," said Erenhouse.

Despite the rising costs and the impact it will have on hospitality and resort owners in her region, Erenhouse believes that it will not result in people looking for other regions of the state to stay. "I don't think that the lodging facilities would allow that to happen," said Erenhouse. "They'll probably do what they've always done, suck it up and give outstanding service."

The problem, Asciutto said, is that Comcast is the only cable provider in the area. The only other recourse owners would have is to choose a satellite cable company - such as Dish Network or Directv - to meet their television needs.

Representatives from Directv made a presentation to some hotel and motel owners, Benway said. While she said the initial investment was rather costly, Asciutto said that the monthly costs per unit were about one-third of the cost of Comcast if they were to switch to either one of the two companies.

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Motels troubled by Comcast price hike