Despite ban on cable deal, he's caught in billing bind

The Federal Communications Commission banned exclusive contracts between cable operators and apartment and condo owners two years ago, saying millions of consumers in high-rise towers or gated communities shouldn't be forced into one pay-TV service.

The influential District of Columbia Court of Appeals upheld the FCC's decision in May - a victory for TV viewers, right?

That's news to William R. Crumley Jr. He's a retired Philadelphia school principal in a battle with his condo association, which is suing him in small-claims court for more than $5,000 for unpaid Comcast Corp. cable bills, attorneys fees, and penalties.

"I'm 77 years old, and nobody has ever forced this nonsense on me," said Crumley, whose last principal assignment was at the Fitler Academics Plus School in Germantown from 1975 to 1993. He says he is being forced to buy Comcast under the agreement between the River Park House condo association and the cable giant. His 354-unit condo complex is in the city's Wynnefield Heights section.

Crumley likes Comcast. He had Comcast before this flap. But the new contract, he said, violates his right to choose a TV service if he wanted to change, or simply did not want cable.

"At my age, I don't enter five-year contracts for anything. I couldn't live with myself if I didn't do something about this," said Crumley, who distributed an open letter on the issue to other residents of the building - with doormen and flowers in the lobby - before being sued for cable-bill nonpayments.

The former educator has done his homework, citing in an interview the 1992 Cable Act and the court case involving the FCC and exclusive-contract bans. But victory in Philadelphia Municipal Court, where he is scheduled to appear Wednesday, seems far from certain.

The FCC banned "exclusive" contracts in late 2007. But the agency let stand very similar "bulk-billing" arrangements - a move that was not as widely reported as the much-heralded ban.

Bulk billing allows cable companies to offer discounted cable TV rates to condos and apartments, just as exclusives did. To take advantage of bulk billing, though, all residents in a multiunit building must participate and get cable TV together, the FCC says.

The bulk deals save residents substantial money in below-market cable rates. They also allow residents the option of getting a competing pay-TV service, such as DirecTV. The problem: A resident still has to pay the cable bill.

"I don't pay two companies for anything," said Crumley, who played football for Central High School in the 1950s. "This is entertainment they are trying to shove down our throats."

The condo association in the River Park House signed its first bulk deal in December 2007, a month after the FCC ban on exclusives.

River Park House residents pay $43.95 a month for "preferred basic service" for one television, according to a copy of the 2007 contract on file with the Philadelphia Municipal Court.

The River Park contract also guarantees to Comcast $15,558 a month in subscriber fees, or $186,000 a year, the contract states. The contract was part of the court proceeding involving another River Park resident who refused to pay her cable bill.

Dean E. Weisgold, the condo association attorney, said that the cable TV contract was negotiated for the collective good of River Park House and that it was similar to others at high-rise residential buildings.

He noted that there were not competing pay-TV providers in Philadelphia when the deal was made. That changed this year when Verizon's FiOS TV obtained a video-franchise license.

The "overwhelming majority" of the River Park residents supported the Comcast contract, Weisgold said, because of the per-unit savings. Residents did not vote on the contract, Crumley noted.

Crumley was free to get another TV service, Weisgold said. "If he wants FiOS or whatever, he can do that. He just has to pay the [Comcast] cable bill" as well, the attorney said.

Comcast spokesman Jeff Alexander said Friday that the dispute was between Crumley and the association. Comcast negotiates bulk contracts, Alexander said, because "they're a good economic model for us." Under bulk contracts, Comcast does not have to send a truck to connect or disconnect service when residents move into, or out of, a building. The contracts vary by building and do not always encompass all units in a building, he said.

Controversies have erupted in other states over bulk billing.

Crumley, a 22-year resident of River Park House, said he did not want FiOS TV or DirecTV. He voluntarily bought the Comcast service before the condo association told him he absolutely had to buy it. Then he canceled it.

The condo association has insisted that Crumley honor the contract and pay the cable bill, and last month sued him, saying he owed $5,250 in back cable TV bills, attorney fees, and penalties.

Said the retired educator: "I haven't paid. Whatever the consequences may be, so be it. I always knew I might go to court."

"Exclusive contracts" stipulate that no other company can provide pay-TV service to a multiunit dwelling, such as an apartment building, other than the cable company.

In return for this exclusivity, the cable company typically offers below-market cable rates to residents. The FCC canceled exclusive contracts in 2007, and the action was upheld this year by the courts.

"Bulk-billing" arrangements also are contracts between cable companies and multiunit dwellings. But they are not exclusive because they allow competing pay-TV services to offer products in a building.

However, residents under these arrangements can be forced to pay the cable bill and the competing pay-TV provider. The FCC considered banning bulk billing at the same time it took action on exclusive contracts in 2007.

- Bob Fernandez