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New Cable TV Provider Forecasts Growth : Television: Among the goals of the New York-based company are more ethnic programming and an increase in subscribers.

December 22, 1991|DAVID HALDANE | TIMES STAFF WRITER

Officials of a New York-based cable company planning to purchase the cable franchise in Long Beach say they want to increase the number of subscribers in the area and offer more programming aimed at specific ethnic groups.

"Long Beach is very demographically diverse," said Rod Cornelius, vice chairman of Cablevision Industries Corp. of Liberty, N.Y. "We are absolutely enthusiastic about (beginning operations) there."

Cablevision officials announced last week that they had struck an agreement with Simmons Cable Communications of Long Beach, which has held the city's cable franchise since 1985. The $132.5-million deal is subject to the approval of the Long Beach City Council, a process that could take up to six months. To close the deal, the New York company teamed up with Kohlberg Kravis Roberts & Co., a major investment firm.

"The investors in the Long Beach cable system are at the point where they'd like to recoup their investment," Steven J. Simmons, chairman and chief executive officer, said in explaining the reasons for the sale.

Officials at Cablevision Inc., which operates cable systems in 600 cities throughout the United States, say they welcome the acquisition as an opportunity to repeat the success they have encountered in the west San Fernando Valley, where they operate a system covering 186,000 households.

In the four years since that franchise was purchased, Cablevision has increased the number of subscribers from about 60,000 to about 90,000, said Dave Testa, company vice president. During the same period, he said, basic subscriber rates have gone up 75% to $22.75 a month--compared to an average increase in the Los Angeles area of about 107%.

"Generally, they do a satisfactory job," said Susan Herman, general manager of the Department of Telecommunications for the city of Los Angeles, which oversees the San Fernando Valley franchise. "They've had problems, but when problems arise they take care of them."

Among the problems, she said, have been occasional complaints about programming, program guides, billing and repairs. The company has taken appropriate steps to resolve such concerns, she said, including hiring extra personnel and reversing prior decisions when confronted by public discontent.

"What's positive is that they're willing to admit when they're wrong and make corrections where appropriate," Herman said. "They can listen to their customers. They are a more-than-adequate operator."

Sherry Blohm, manager of the Long Beach Department of Telecommunications, declined to comment on Simmons' performance in the city. She did, however, refer to a document indicating a steady decrease in the number of annual customer complaints the company has received in recent years.

During one hearing in 1988, irate customers complained about the company dropping Prime Ticket, a sports channel. The channel was eventually restored, according to Frank McNellis, general manager.

Since purchasing the financially ailing franchise from a company owned by Times Mirror and Knight-Ridder in 1985, Simmons has increased the number of subscribers from about 37,000 to about 66,000, McNellis said. During the same period, it has decreased response time to service calls by approximately 75%, added 20 new channels and bringing the total to 52. It increased basic subscriber rates from $10 to $24.85 per month, he said.

Yet the company is still at least a year away from turning a profit, McNellis said. "The business is self-supporting," he said, "but we're not making any profit at all due to the (costs of expanding.)"

The lack of profitability, however, had nothing to do with the decision to sell, McNellis insisted. "The partners just felt it was time," he said.

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