Local Government and Politics, News

Comcast Corp.’s monopoly on cable service in Peabody is about to end

PEABODY — Comcast Corp.’s monopoly on cable service in the city is about to end.

Fulfilling a long-term goal, Mayor Edward Bettencourt Jr. has signed a provisional agreement to license RCN Corp., the New Jersey communications company, to offer cable TV and high-speed Internet services in Peabody.

“One of the most frequent complaints I get is we lack an alternative to Comcast,” he said.  “I’ve always been frustrated that they’ve had a stranglehold on cable service and I felt we needed another provider.”

Since 1979, Philadelphia-based Comcast Corp., through Xfinity, the company’s TV and Internet service provider, has been the only game in town. While Bettencourt tried to entice Verizon to bring FIOS, its high-speed fiber optic service, to the city, the telecommunications giant has said it would not expand beyond the communities in the pipeline.

Last year, Verizon kept its promise for a major expansion in Boston with a $300 million investment in hardware to upgrade the city’s networks.

RCN serves 19 communities from Boston to Woburn. The company most recently rolled out its services in Everett and Revere, where it competes head-to-head with Comcast.

As RCN was building its network in those two cities, Bettencourt talked with the cable provider about coming to Peabody.

But don’t expect lower prices from RCN, the mayor said.

“They’ve said they would provide better customer service and packages, but they are not a bargain basement provider,” he said. “But anytime you can pit one competitor against another, it gives people the ability to shop around and get the best deal.”

A check of prices online found Comcast offers its basic cable TV and Internet package for $39.99. But when the special price ends, it jumps to $89.99. RCN offers its lowest priced package for $44.99, but does not provide its standard prices when the deal ends.

Claire Papanastasiou, an RCN spokeswoman, did not return a call seeking comment.

Matt Sienkiewicz, an associate professor at Boston College, said there’s anecdotal evidence to suggest competition raises the bar.

“It’s true that cable providers, particularly in communities where there’s a monopoly, are among the least popular institutions in America,” he said. “But over the past decade, Xfinity’s service is light years better than it was. Competition has something to do with that.”

Marc Goodman, a Comcast spokesman, said despite competition from cable companies and satellite providers, customers choose Comcast, the world’s largest cable TV provider.

He said the company has invested in transforming the customer service experience with the opening of a Xfinity Comcast Service Center on Endicott Street in Danvers.

Under the terms of the agreement, RCN, like Comcast, will pay the city 5 percent of its gross revenues. Most of it goes into a technology fund to help pay for Peabody Access Telecommunications, the city’s cable access TV station.

Peabody expects to receive $1.1 million this year from Comcast, which had 17,461 customers last year, according to the Department of Telecommunication & Cable. Access TV gets $1 million and the city gets the rest.

The desire for an alternative to Comcast spans decades and two mayoral administrations, Bettencourt said. While Peabody residents get slick advertisements for services from competitors, Comcast remained the only game in town.

The next step is a public hearing on the provisional license on Wednesday, June 26 at City Hall. RCN service could begin as early as next spring.

Bettencourt thanked the Peabody Municipal Light Plant, which reached a separate agreement with RCN granting utility pole space for its fiber buildout.  The utility company’s leadership recognized the benefit of competition for Peabody residents and businesses and worked tirelessly toward an agreement, he added.    

As part of the agreement with the city, RCN vowed to build a fiber infrastructure for municipal use, the so-called I-Net.  Bettencourt lauded this aspect of the deal which, he said, could result in significant savings for city departments and schools on Internet services.  

The Bettencourt family are Comcast customers, but might not be for long.

I think RCN will be very well received, they will offer very competitive packages and there is growing frustration with Comcast,” he said. “Across the city people will be very happy to have an alternative … and I will certainly look into switching.”

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