Just six months after arguing that higher cable fees would drive subscribers away, Century Cable Television has announced it is about to impose a double-digit rate increase.
The 13.9% rate boost, which takes effect Dec. 1, follows a high-spending lobbying campaign last spring by cable operators, including Century, to defeat a proposed 10% utility tax on cable services. Industry officials argued that the tax would push the cost of cable beyond the reach of many poor residents and cripple the industry.
City Councilman Zev Yaroslavsky, who led the unsuccessful council fight to implement the tax, said Century's decision to raise rates at this time proves "just how disingenuous that campaign was."
"I suspected that they were fighting the tax for themselves and not for the people of the city," said Yaroslavsky. "They wanted the money in their coffers and not to support more fire and police services. And that stinks."
Bill Rosendahl, a Century Cable spokesman, said the decision was simply "because of increased costs of programming and operations. . . . We're running a business. We have to balance our books."
Century will raise its basic monthly service rate by $2.95 a month to $24.20--among the highest rates in the city. It will also raise fees on additional hookups by 99 cents to $4.75 a month. Fees for converters and special programming will not be increased.
Century Cable serves about 113,000 subscribers on the Westside, Sherman Oaks and in Eagle Rock.
Cable companies are free to raise their rates after 30 days' notice.
John Gibbs, president of Cable Television Operators of Los Angeles, a trade association, said programming costs alone have risen by 60% in the last three years. Gibbs added that many taxes, such as franchise fees and federal copyright levies, are already built into cable rates.
Yaroslavsky said he has expected all along that Century and other cable operators had plans to raise rates. "This may be the first, and I suspect it will not be the last (fee increase)," Yaroslavsky said.
Century has had at times a stormy relationship with the city.
In 1989, the Telecommunications Commission threatened to revoke the company's three franchises because of a high number of customer complaints. At the time, Century had 26% of the city's cable subscribers, but 41% of the complaints filed against cable operators. Since then, its complaint rate has fallen dramatically and now is slightly under the average for the nine operators.
During this year's city budget deliberations, cable operators applied a full-court lobbying press at City Hall. The operators spent between $500,000 and $1 million on radio, newspaper and cable TV ads, and sent 100,000 pieces of mail to council members in their successful bid to defeat the 10% cable tax.
Among their arguments was the claim that thousands of cable subscribers would not be able to afford the 10% increase in monthly cable bills that would result from the tax.
Rosendahl said Century opposed the tax "because it is unfair. It was a fairness issue" and not a matter of the affordability of cable services. Rosendahl said the company only recently decided to impose a rate increase.
During the budget debate, Yaroslavsky publicly challenged cable companies to commit themselves to keeping a lid on rates for a year if the tax were defeated. Although representatives of most of the cable companies, including Century, were in council chambers that day, none accepted the challenge.