It appears that Frontier Communications is raising its cable TV installation fees in Oregon so high – from $79 to $500 – and is likely pushing for a 46 percent increase in cable TV prices, that it is discouraging customers from signing up, according to media and regulatory reports.

In March, Frontier said it would require $500 for installation on a new FiOS (News - Alert) video customer.  DigitalTrends said Frontier wants customers to sign up for DirecTV (News - Alert) instead – because it is more profitable for the company.

The regulator overseeing rates, the Metropolitan Area Communications Commission (MACC), asked Frontier how it could say “it was committed to video programming using its FiOS network” and still have “plans that appeared intended to drive away customers.”

Frontier told MACC in March it was “exercising its right to terminate the Franchise and all obligations under it.” MACC said that termination of the franchise is not something Frontier can do in the MACC coverage area until at least late 2011.

DigitalTrends said MACC regulators are recommending residents choose Comcast (News - Alert) instead of Frontier.

In addition, if Frontier attempts to stop providing cable TV service, MACC may use its regulatory power to prevent them from following that path, according to The Oregonian.

“MACC believes Frontier's market share is more than adequate and … the company could not reasonably invoke the termination clause,” the commission's regulatory affairs manager, Fred Christ, wrote in a report that was quoted by The Oregonian.

“The $500 installation fee is simply ridiculous and unjustified, particularly when weighed against free or typical $30 installations by Comcast and similar offers from satellite providers. Whatever the benefits of Frontier's FiOS video, we do not believe the service is worth that initial investment,” Christ adds in his statement, as reported by The Oregonian.

Frontier complains it is losing money on its video service, The Oregonian adds.

MACC, which regulates local Cable TV, has the authority to enforce franchise agreements, such as the one Frontier may try to use to avoid offering TV service. 

The Oregonian adds that Frontier bought Verizon's (News - Alert) territory in suburbs around Portland during 2010.

Frontier claims it will continue to offer phone and high-speed Internet service in Oregon, according to The Oregonian. In related news, TMCnet reports that Frontier Communications invested more than $5.5 million for an expansion of broadband service in Oregon since July.