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Group W Cable Takeover Faces Growing Opposition

December 07, 1986|JULIO MORAN | Times Staff Writer

Torrance officials are urging the City Council to reject Century Communications Corp. as its new cable television operator when the matter comes up Tuesday.

Meanwhile, officials in three other South Bay cities--El Segundo, Hawthorne and Lawndale--are pursuing efforts to prevent Century from taking over the cable systems there.

Torrance City Manager LeRoy Jackson and city Cable Administrator Warren Carter are recommending that the City Council reject Century because it may be operating on "totally unrealistic financial projections" and may be planning drastic changes in rates and services, they said in a staff report.

Century currently operates the cable system in Redondo Beach, a 17-year-old system that has the highest rates in the South Bay. A Redondo Beach customer pays $14.95 for basic service, almost twice as much as a Torrance resident pays.

Leonard Tow, president and primary spokesman for Century in New Canaan, Conn., was out of town last week and could not be reached for comment. In previous interviews, he has said that the company does not plan any major changes in rates or service.

If the council rejects Century, it would be the latest in a growing number of challenges to Westinghouse Electric Corp.'s sale of its Group W Cable subsidiary to a consortium of cable operators that includes Century. In the second step of the deal, the consortium was to split up Group W franchises among its members, with Century getting the Group W systems in the South Bay .

Officials in Torrance, El Segundo, Hawthorne and Lawndale have challenged the Group W sale to the consortium, primarily because they fear the deal would make it easier for Century to step in as the permanent operator. The four cities have filed suit against Group W, claiming that the sale was illegal because they did not approve it, as required in their franchise agreements.

Century has acknowledged that it borrowed heavily to buy the Group W systems, and all four of the South Bay cities have expressed fears that rates will be increased and services such as public access and two-way institutional networks for schools reduced or eliminated to make the systems more profitable.

Century took over management of the Group W systems in the South Bay on June 20, a day after the sale occurred. Since then, however, El Segundo and Torrance have received preliminary injunctions that forced Century out as interim operators. The consortium is running the systems until the cities' suits are heard.

Hawthorne and Lawndale requests for similar court orders will be heard Dec. 16.

Only Gardena has approved the sale of its franchise to the consortium, but it, too, is withholding approval of Century until it completes an analysis of the company's ability to run the system.

Carter said Century has been slow to provide Torrance with financial and technical information to allow the city to determine whether Century is capable of running the system under the provisions of the current franchise agreement.

Decision Postponed

The council had been scheduled to decide on Century Nov. 18, but postponed the decision until Tuesday to allow Century to provide more information. However, Carter said much of the new information has been incomplete.

"Century has failed to provide complete and timely responses to the city's questions," Carter said, adding that there are "suggestions that Century may choose at any time to cease performing provisions of the franchise agreement."

Torrance City Council members contacted last week said they had not decided whether they will follow the staff's recommendation, but Councilman George Nakano said that if no new information is provided by Tuesday, "I would think we would not approve of Century."

Century also is having trouble getting Beverly Hills' approval to take over the Group W system there, and Santa Monica revoked its franchise with Group W in September because of the sale, although Century will be allowed to run the system until the termination becomes effective on Dec. 13, 1987.

Group Optimistic

William Koplovitz, a New York attorney coordinating the transfer of the franchises to the consortium, said the group is still optimistic Century will eventually be approved by the cities.

"We support Century," he said. "We believe the communities will come to accept them. The company has the ability to live up to the commitments" in the franchise agreements.

But sources close to the transfer negotiations who asked not to be identified said other members of the consortium--American Television and Communications Corp.; Tele-Communications Inc.; Comcast Corp. and Daniels & Associates Inc.--are growing weary of the problems with Century and have set up a separate company to take over franchises temporarily in cities that reject Century. That could allow the sale to the consortium to close without cities having to approve an individual cable operator.

Because Century is a partner of the consortium, the other members cannot ask Century to step aside, the sources said, but when cities formally reject Century, the consortium would be free to put those franchises in the new company.

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