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Faced with having to compete with the city-owned EPB for cable TV customers, Comcast Corp. wants Chattanooga to give up its right to regulate what the company charges for cable television service.

Russell Byrd, senior director of government and public affairs for Comcast, said local governments with Comcast franchises should drop their regulation of basic service rates and installation fees.

The new franchises granted last year for EPB to begin cable TV service in Chattanooga, East Ridge and Red Bank don't include provisions for regulating rates.

"The city of Chattanooga regulates Comcast rates, holds our franchise agreement for compliance purposes and also competes with us for customers in Chattanooga," Mr. Byrd said. "By the city taking an affirmative step to deregulate (Comcast rates), they put themselves in the best possible public interest position as clearly supporting free and unencumbered competition."

Mr. Byrd asked the Chattanooga City Council last week to send a letter to the Federal Communications Commission, effectively deregulating limited basic cable rates. The FCC rules don't allow municipalities to regulate rates for small cable providers or those operating in competitive markets.

Chattanooga has had the right to regulate limited basic rates for Comcast under the original FCC rules for such cable TV agreements, which were adopted in the 1980s and 1990s. But Chattanooga City Attorney Michael McMahan said the city has not tried to set prices for any Comcast services during his tenure.

"So far as I know, we've never regulated Comcast rates, but I'm still researching the franchise agreement," Mr. McMahan said.

Mr. Byrd said Comcast must compete with both EPB for cable service and with Dish and Direct TV for video services via satellite. AT&T also has pledged to bring its U-Verse Internet Protocol video service to Chattanooga by this summer.

EPB launched its fiber-optic video service last September and already has attracted more than 4,500 customers. The city utility has set a goal of serving 35 percent of the Chattanooga market with its fiber-optic service within three years.

The cities of Signal Mountain and Chickamauga, Ga., recently removed any pricing regulations from franchise agreements with Comcast.

"We agreed to notify the FCC that we will not be controlling Comcast rates any longer," Signal Mountain Town Manager Honna Rogers said.

The Signal Mountain Town Council approved a five-year franchise contract with Comcast in January, she said.

WHAT'S NEXT

City Attorney Mike McMahan is researching the Comcast franchise to report to the City Council on whether to write a letter to the FCC about rate regulation.

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