Rate Storm

by Leslie Turk

Cox Communications enrages local customers by bumping The Weather Channel and other networks off its basic cable programming.

As of Aug. 15, Cox Communications' basic service, channels 2-24, dropped from $15.96 to $12.97 a month. But some of the tier's most popular networks ' The Weather Channel, ESPN and TV Guide ' have been bumped from the basic lineup. And for folks who want those programs back, Cox has a nasty surprise for them.

They'll have to subscribe to Cox's expanded basic lineup, channels 2 to 72, and shell out a whopping $47 a month, a $31 ' or 194 percent increase ' over the price they previously paid for basic programming.

Cox spokeswoman Sharon Kleinpeter attributes the rate adjustment to increased programming costs, fleet fuel spikes and rising insurance rates.

Cox is also making up for lost time. After years of annual hikes and recent increases in neighboring markets, the Acadiana market hadn't had a price increase since February 2004, a much-needed break most people attributed to the threat of competition from Lafayette Utilities System. But legal challenges have delayed LUS' effort. Just last week LUS lost another battle in its plan to provide cable, Internet and phone services via a fiber-to-the-home network when the Third Circuit Court of Appeal ruled that the bond ordinance voters passed last year, which local government tweaked in hopes of complying with a previous Third Circuit decision, violates the state's Local Government Fair Competition Act. Lafayette Consolidated Government said it plans to appeal to the state Supreme Court.

Kleinpeter, who says she can't address the rate decisions of previous Cox management, acknowledges that moving The Weather Channel on the heels of two massive storms and in the midst of a new hurricane season hasn't gone over well with local subscribers. She maintains the move was necessitated by a "contractual obligation" that requires Cox to group networks like The Weather Channel with other programming ' all of which can't be squeezed into the basic tier. When pressed for specifics, however, she cites confidentiality clauses in the contracts.

The Weather Channel has no such contractual obligations regarding programming partners. "There would be nothing in our contract like that," says The Weather Channel's Becky Powhatan, executive vice president of distribution and business affairs for the Atlanta-based cable network. "On occasion we have heard that other networks try to keep us from being carried on the basic tier," adds Powhatan. "We always prefer to be on basic, [but] in most markets, we are on expanded basic."

Clara LeBlanc-Burke, executive director of the Lafayette Council on Aging, plans to meet with Cox about offering a discount to senior citizens, a key demographic for The Weather Channel. LeBlanc-Burke says Cox initiated the talks. But Kleinpeter says what's under consideration is a break on basic service, which won't address the primary issue of the elderly's access to weather updates 24 hours a day.

The Weather Channel has moved from Channel 3 to 55, and ESPN from 12 to 35, the same lineup in Baton Rouge, a parity factor that also motivated management's decisions, according to Kleinpeter.

The Cox official is unsure why Cox's previous Lafayette management had The Weather Channel on the basic tier. "I just can't speak to what happened before we took over," she says, referencing the January 2006 consolidation of Cox's Baton Rouge and Lafayette operations. "It just has to do with the changing world of our business. It's a change that's very painful; I understand that."

According to Powhatan, The Weather Channel is in the basic lineup in New Orleans, a different Cox system.

Steve Creeden, who joined LUS' effort shortly after being let go by Cox in early 2004, says Cox's motivation is simply to drive subscribers to the more expensive package. Creeden was often the lightning rod for Cox when presenting rate increases to the council and allowing for public input, a courtesy Cox chose to forego this time around. "I felt like you have to put a face on Cox. You have to allow [council members and residents] to ask questions," Creeden says.

Rather, the company contacted City-Parish President Joey Durel within the 30-day notification period and informed him of the changes. (They are required to make written notification but did not do so, according to local government's legal counsel, Pat Ottinger.) Though local government has no say-so in the rates Cox charges, which are regulated by FCC formulas (and in fact stands to get more money because LCG's franchise agreement is 3 percent of Cox's gross revenues), council members want to discuss the changes with Cox reps and asked them to attend the upcoming Aug. 29 council meeting.

Among other local changes is a $2 increase in high speed Internet, a $6 increase in expanded basic, the relocation of KATC TV3 from Channel 4 to 5 to make way for Cox's own local sales station on Channel 4 ' and the displacement of Acadiana Open Channel from channels 5 and 19 to 15 and 16, a point of contention for local government. In an Aug. 7 letter to Cox, Ottinger says per the franchise agreement, Cox needs to explain why it moved AOC. In a separate letter also dated Aug. 7, he asks Cox why it has not been offering on each of its Lafayette subscribers' bills the opportunity to voluntarily contribute 50 cents monthly to AOC, as required by the agreement. "Because this violation has resulted in lost revenue to [AOC], it is requested that you also advise as to the action which you will undertake in order to mitigate this loss of revenue for the past violations of the Franchise Agreement," Ottinger writes.

As of press time, Kleinpeter had not seen either letter.

"At the end of the day, I don't think Cox [will] give a hoot about any contract," says AOC Executive Director Ed Bowie. "They're nearly invincible, and they know it."