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Cities Acting to Regain Control Over Cable Rates : Communications: Fees have soared since 1984. A new federal law allows local regulation, but some say it would be too costly.

May 30, 1993|DARYL KELLEY | TIMES STAFF WRITER

Unable to set cable TV prices for nearly a decade, frustrated local officials are taking steps to stem those soaring rates and control the costs of a confusing maze of add-on charges levied by cable companies.

Armed with the 1992 Cable Act passed by Congress last fall, officials in cities throughout Ventura County say they are gearing up to regain control of basic cable rates, which have increased at twice the pace of inflation since deregulation in 1984.

In Thousand Oaks, the City Council has already voted to administer new federal price guidelines for basic service, though cities and counties cannot apply for such federal certification until June 21.

The Moorpark City Council will consider the issue Wednesday, and the Ojai council is expected to act soon. In every other city in the county--and within county government--officials say they have begun reviewing the Federal Communications Commission's new cable rules.

Residents of Ventura County, blocked by mountains from clear broadcast signals, are a captive audience for cable companies operating here without competition, officials said.

"I have been absolutely frustrated by the rate increases and having no way to do anything about them at all," Moorpark Mayor Paul Lawrason said.

Ojai Councilwoman Nina Shelley said her community is "unhappy with the rates. We just had an increase 60 days ago, and $2 or $3 to the homebound elderly makes a big difference."

County Public Works Director Art Goulet, who oversees cable franchises in unincorporated areas of the county, said he thinks the Board of Supervisors will want to retake control of basic cable rates.

"Cable television has become a utility for most folks," Supervisor Vicky Howard said. "I think we're going to have to get back into the loop."

Even as city and county staffers review more than 500 pages of new cable regulations, however, questions remain about how local government can afford to monitor the industry.

It probably would cost tens of thousands of dollars a year to properly oversee rates and services regulated under the new law, city officials said. And most cities already receive the maximum 5% franchise fee from cable companies.

With costs in mind, in fact, Santa Paula Mayor Margaret Ely and Ventura Mayor Greg Carson said that regulating cable rates is not a top concern to them. Absent citizen complaints, they said, it would not make sense to spend money on a cable expert while cutting essential services to balance shrinking budgets.

"It's a question of priorities," Ely said. "People can watch TV or not. But children have to be educated, and the community has to be served. . . . And this doesn't (fit in) right now."

If cities decide not to regulate local cable companies, customers probably would have no other place to complain about excessive costs. The FCC has informed local officials that franchise fees should cover oversight costs, and the FCC would not assume the cities' role unless they could prove financial hardship.

While city officials ponder how to reassert local control over cable franchises, the operators themselves are trying to determine exactly what the voluminous regulations spawned by the Cable Act mean to them.

For example, cable officials say that they don't know yet whether Ventura County rates are higher than federal guidelines allow and must be cut, because the FCC's rate formulas are so complicated and imprecise.

Everything from the number of channels offered to installation fees and equipment costs and depreciation is factored into the federal cost-per-channel formula.

The federal benchmarks are said to represent the costs of cable services in competitive markets. Cable companies compete directly in only 45 of the nation's 9,400 franchise areas, according to industry statistics.

Under the new rules, cable rates would be rolled back to September, 1992, levels if the current rates exceed federal benchmarks.

FCC officials say this could put $1 billion back into the pockets of cable customers nationwide. Most of the 57 million subscribers should begin seeing a $1 to $3 reduction in their monthly cable bill by August, they said.

After rollbacks to 1992 levels, additional cuts of up to 10% would also be required if the prices still exceeded the new federal guidelines.

"This whole situation is so confusing that the FCC last week held three separate seminars in Washington for the (cable) systems," said Richard Yelen, marketing director for Ventura County Cablevision, which serves about half of the county's 180,000 cable subscribers.

"Then the trade journals came out and said basically that no one still knows what is going on," Yelen said.

Under the new law, local cable companies would be forced to reduce their rates to benchmark levels by cities and counties in coordination with the FCC.

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