Skeptics worry service, rates may suffer if Comcast spins off MN

Updated: 10:25 a.m. | Posted: 4 a.m.

Right now, GreatLand Connections exists only on paper. But if you buy TV, Internet or phone service from Comcast in Minnesota, GreatLand could be your next cable provider.

If federal regulators back its $45 billion merger with Time Warner, Comcast says a new company, GreatLand, would be formed to take over the cable giant's operations in Minnesota and 10 other states.

The move is meant to ease worries that Comcast and Time Warner combined would control too much of the pay TV and broadband markets in the United States.

The potential spinoff, however, makes some regional regulators nervous. Some worry GreatLand's prices and service quality will be worse than what the estimated 550,000 Comcast subscribers in the metro area have now.

Comcast officials dismiss the concerns. "Our goal is to make the transition to GreatLand Connections as seamless as possible for our customers, if it is indeed approved," Comcast spokesperson Mary Beth Schubert said.

GreatLand will rely on rival Charter Communications for help with several important functions, including customer service, engineering and billing.

Greatland won't skimp on technology, Schubert added. "It will continue to invest in the fiber network infrastructure to bring Twin Cities customers the highest quality and most reliable service anywhere."

Despite those reassurances, many metro-area cable regulators are leery about how long it will take this newborn with $9 billion in assets and operations in 84 metro area cities including some in western Wisconsin to learn to manage all its arms and legs.

Minnesota DFL U.S. Sen. Al Franken came out almost immediately as an opponent of the proposed merger with Comcast and Time Warner. The city of Eagan has asked the Federal Communications Commission to reject the Comcast-Time Warner deal fearing inferior service, higher rates, and lagging broadband services.

Given the uncertainties, many regional regulators demanded promises from GreatLand. Minneapolis and other cities, for instance, say GreatLand has agreed to not make subscribers responsible for the billions of dollars in debt and other costs related to the company's creation.

Minnesota cities served by Comcast

Source: Minnesota Cable Communications Association

The Minnesota Association of Community Telecommunications Administrators asked the FCC to prohibit GreatLand from passing on to consumers any of the costs of the transaction for at least five years. The state Commerce Department says GreatLand has committed to freezing phone rates for two years and to continue offering fast Internet connections to low income families at a discount.

In approving franchise transfer requests, cable commissions are pretty much limited to assessing a company's competence to operate a cable system. Rates, programming and services are generally beyond the purview of local authorities. Despite the handwringing, it appears, at this point, that no city or town will reject the transfer of a local franchise to GreatLand.

But it was hard to evaluate GreatLand's qualifications to run a cable franchise, said attorney Brian Grogan, who works with several local cable commissions.

"There isn't a way to assess the operating history of this company or how they have performed in other communities, because it is a brand new entity," he said.

Chris Mitchell, director of the Community Broadband Networks Initiative at the Institute for Local Self-Reliance, wonders if GreatLand will match Comcast in delivering speedy Internet connections.

"For all the criticism that Comcast gets and deserves, Comcast's broadband is among the best," he said.

Correction (March 24, 2015): An earlier version of this story incorrectly reported the number of Comcast subscribers. The current version is correct.

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