The Torrance City Council unanimously approved a landmark agreement with Paragon Communications early Wednesday that could make Torrance the cable television production center for four South Bay cities.
The complex agreement calls for Paragon to pay Torrance $1 million by the end of the month to settle a protracted dispute over rental of studio space and other cable television facilities next to the Torrance City Hall.
The pact, a byproduct of intense negotiations in recent weeks, allows Paragon to use one of two studios in the city's new telecommunications center to produce local programming for Gardena, Hawthorne and Lawndale.
Paragon will be able to use the studio 24 hours a week for the remaining nine years of its franchise with Torrance.
Torrance will pay for improvements to finish the studio and will install television cameras, lighting and production equipment. The city also maintains its own studio in the building for production of local programs.
The settlement ends a dispute between the city and Paragon over provisions of the city's original franchise agreement with Group W Cable Inc. Paragon took over the Group W Torrance franchise last March.
The agreement, approved shortly after midnight Tuesday, provides a key protection to the city in the form of a pledge by Paragon not to challenge other provisions of the franchise in court. Recent federal court decisions in California have concluded that under the First Amendment, cities may not award exclusive franchises to cable television companies.
The decisions, which are being appealed to the U.S. Supreme Court, threaten to bar local governments from requiring franchise fees and other concessions from cable television operators.
Paragon Vice President Jerome Ramsey said others in the cable television industry have "questioned the wisdom of the agreement in light of the court decisions." But Ramsey told the Torrance City Council that Paragon values "a good working relationship with this city."
The agreement, he said, "is one that preserves local programming for the city of Torrance."
As part of the package, Torrance agreed to relieve Paragon of an annual franchise fee equal to 3% of its gross revenues from Torrance operations. The fee amounted to $264,000 last year.
Instead, Paragon will pay the city $130,000 a year to underwrite the costs of local television production in Torrance.
Joseph Arciuch, a member of the city's Cable TV Advisory Board, questioned whether Torrance was "gaining or losing something in the process" of settling with Paragon. Arciuch noted that the city would be receiving half of what it previously earned from the franchise fee for local production.
Paragon still must work out agreements with the other four cities to produce programming for their systems at the Torrance studio, but no significant problems are expected.
Paragon, which has about 26,000 cable subscribers in Torrance, is a partnership composed of American Television and Communications Corp. of Denver and Houston Industries Inc., parent company of Houston Lighting and Power.