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All O.C. Subscribers Will See Cable Rate, Programming Changes

August 28, 1993|ANNE MICHAUD | TIMES STAFF WRITER

The local results of Congress' new cable television law, which takes effect Wednesday, are nearly as numerous as the cities in Orange County.

Cable subscribers in Orange, for example, will pay the same $23 for expanded basic cable service as before, but they'll save $4.20 a month to hook up a second TV set.

Many South County residents will see slight decreases in basic and expanded cable rates, but will also now have to pay $2.26 a month extra for the American Movie Classics, Turner Network Television, the Discovery Channel and the Nashville Network. Those four channels previously were included in expanded basic service.

Santa Ana cable viewers also will see no change in basic service rates but will have to pay 50 cents more each month if they want HBO.

One thing all 520,000 cable households in Orange County share is change. As of Sept. 1, nine of the region's 10 cable operators will offer new channels, some existing channels will move to new places on the dial and there will be lower monthly bills for about two-thirds of the subscribers.

Operators say they arrived at their new rates by plugging numbers into a complex formula. The Federal Communications Commission's rule book for rates is 541 pages long--or more than 700 pages with addenda.

But, even then, the numbers are open to interpretation.

"It's much like income taxes, you ask 10 experts what to do, and you get 10 different answers," said Steve Everett, general manager of Cablevision of Orange. "And the FCC continues to make clarifications."

As a result, some cable operators were uncertain what their rate and channel changes might be as late as Friday.

Comcast, which has offices in Fullerton and Santa Ana, for example, is mailing notes of explanation to their customers this weekend in the September billing statements. Comcast, whose parent company is the nation's third-largest cable operator, plans to adjust rates on its October bills and pro-rate the changes back to Sept. 1.

Local cable operators are worried about facing a crush of telephone calls from customers confused about changes in rates, programming and channels. Several said they are hiring temporary help to answer customer calls and going over the new regulations with their staff.

"It's been confusing and difficult, and we've been working under very short time frames," said Donald Granger, general manager for Multivision Cable in Anaheim. "I look to a confusing three to six months ahead for us and for the consumer."

Over the years, the cable industry has been accused of aggressively raising its rates and of being unresponsive to viewer complaints about picture interruptions, poor customer service and other problems.

The Cable Television Consumer Protection and Competition Act of 1992, which Congress passed in October over the veto of President Bush, is intended to rectify those complaints.

Rate reduction is just one portion of the law. The FCC has hopes of trimming $1 billion off the revenue of cable companies, or about 10%.

Operators were hoping that the FCC's so-called benchmark rate formula would take into account the wide range of costs in various markets. But they were disappointed.

The national benchmark figures do not take into account factors such as higher property taxes or labor costs in Southern California, and particularly in Orange County.

"Our gross profit is going to decrease $2.5 million for this division" this year, said Mark Mangilia, executive vice president of Paragon Cablesystems in Huntington Beach.

Aside from billing changes, Orange County cable viewers may have noticed changes in programs throughout the summer.

In June, some local operators began adding "must-carry" stations to their services. Those are smaller stations in the five-county Los Angeles area that are taking advantage of another aspect of the Cable Act: Federal law now requires cable operators to carry broadcast stations that are free, if those stations demand it.

Some "must-carries" are KVCR, a PBS affiliate based in San Bernardino; KRCA, a home shopping and Asian language station in Riverside; and KLCS, the Los Angeles school district's station.

Some cable companies object that the FCC is muddying the relationship between programming supply and customer demand.

"We would like to make our decisions on what (programs) to carry based on the customer," said Multivision's Granger. "If customers don't want Coca-Cola, a grocery store is not necessarily required to carry Coca-Cola."

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