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City Lawmakers Ask Attorney General To Investigate Comcast For Price Gouging

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Three Baltimore City Council members and the Baltimore Digital Equity Coalition have asked Attorney General Brian Frosh to investigate Comcast for price gouging.

 

Their request comes after the company established a plan to charge Xfinity customers without unlimited data subscriptions who exceed 1.2 terabytes (TB) earlier this month.

In a letter to Frosh, Democrats  Kristerfer Burnett, Zeke Cohen and Ryan Dorsey said Comcast’s fees bar a portion of the city’s low-income, Black and Latino communities from internet connectivity, resulting in “digital redlining.” 

Raquel Coombs, a spokeswoman for the Attorney General, confirmed Frosh received the letter. “It’s something we will certainly look into,” she said. She declined to comment further. 

About 96,000 Baltimore households do not have home wireline broadband services, and 52,000 lack any kind of broadband connection. More than half of non-broadband subscribers cited cost as the reason they lack service, a 2019 Pew Research Survey found. 

The digital divide has been made more dire as many Baltimoreans have been working or learning from home since the spring, when the COVID-19 pandemic began. 

The councilmen and the Baltimore Digital Equity Coalition argue that the data cap, which will allow customers without unlimited data plans to use more than 1.2 TB as long as they pay for additional data, is “the height of corporate greed.” 

“The threshold is arbitrary,” Dorsey said. “It's to Comcast’s advantage to set it around a fairly high amount. They're playing games around their messaging in order to better couch their wealth extraction from a poor city like Baltimore.”

Tia Price, director of the Baltimore Digital Equity Coalition, said the letter is an effort to put Comcast on notice.

“Most people think that the Internet is a utility,” Price said. But it's not regulated. It's very much a free market.”

Cohen said the cap adds “the ultimate insult to injury.” 

“It’s unacceptable that in this arbitrary and capricious way, this mega company decides to jack up rates on Maryland consumers, particularly on Baltimoreans, many of whom we know are struggling day to day to pay their bills,” he said.

Their letter is also a broader criticism of the company’s fees, too, Cohen said, citing Comcast's Internet Essentials program, which provides discounted rates for those eligible for public assistance.

“They have done a whole publicity tour around their Internet Essentials program,” Cohen said. “However, we know that Internet Essentials is simply not fast enough for most of our young people to learn online. The speeds are simply not adequate.”

Franca Muller Paz, a teacher at Baltimore City College High School and a former Green Party candidate for the city council, said her students whose households subscribe to the discount program can’t make it through a virtual class without losing their internet connection.

“Almost a third of students are constantly being kicked out,” she said. “I'd also love to see my students, but as soon as they turn their video feed on, it splits their signals.”

That reduces her ability to build relationships with her students, which in turn affects their learning, Muller Paz said.

Kristie Fox, a spokeswoman for Comcast, called 1.2 TB a “massive amount of data” that “a very small percentage of customers” hit. The plan is structured to allow Comcast to charge customers generating the greatest demand for network development and capacity more for their increased usage, she said.

“Our Internet data plan helps to ensure we can meet our customers’ needs now and in the future,” Fox said.  

Customers have several options if they anticipate surpassing 1.2 TB in data usage.

Those who lease a modem from the company can pay an extra $11 a month for unlimited data, as well as several other features. Those who don’t lease modems can pay an additional $30 per month for unlimited data. Customers uninterested in those options can pay $10 for every 50 GB over 1.2 TB, with a maximum monthly charge of $100. Customers will be given a free month the first time they surpass 1.2 TB in data usage. 

After the letter to Frosh was released Wednesday, Comcast announced it would extend its initial three-month grace period to allow customers to adjust to the data cap, which debuted Jan. 1.

The earliest Comcast would charge Maryland customers for exceeding 1.2 TB is August.

Investigating the lawmakers’ allegation may prove difficult.

Maryland does not have a price gouging statute. But when Gov. Larry Hogan declared a state of emergency last spring, the order gave the attorney general the ability to prosecute businesses for attempting to take unfair advantage of consumers through its duration.

The state of emergency is due to be lifted at the end of April. Hogan may choose to extend it.

Cohen said Maryland’s lack of price gouging regulations outside of the governor’s order raises a red flag.

“This is cause for us to rethink whether we actually need legislation to extend the laws around price gouging, because the issue is not going to go away,” he said.

 

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