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For years, the cable TV industry was on its own, free to conduct business as it saw fit. But then the federal government stepped in and gave cities the power to regulate rates and services. And customers have flexed their muscles as well, sending a clear . . . : MESSAGE TO THE MEDIUM

March 20, 1994|KEN ELLINGWOOD | TIMES STAFF WRITER

Five times a day, Andy Steuer picks up his office phone, dials the local cable television company and clicks a stopwatch.

It's a test.

The folks at Century Cable in Santa Monica are supposed to answer customer calls within 30 seconds under new federal rules that give cities the power to regulate their local cable companies. Steuer, a part-time staffer for the city of Beverly Hills, notes the elapsed time, says thanks and hangs up. He finds that the company flunks a lot.

Welcome to the brave new world of cable TV regulation. The stopwatch checks are just one sign of cities' new regulatory authority over cable companies. The local power was granted by a 1992 federal law that reimposed regulation on cable firms following five years of unfettered operation--and, according to many customers--skyrocketing prices and grudging service.

Beverly Hills and West Hollywood, both with long histories of friction with Century over rates and service, have joined a handful of trailblazing cities around the country to make use of this new clout. This month, they ordered Century to cut the basic rate it charges residents.

It's a complicated new job; most Westside cities have hired consultants to guide them through the blizzard of confusing rate rules. Local officials were once powerless to offer much more than sympathy to residents upset with prices. Now they stand to accept glory or fire for their decisions on cable service--a hot-button issue that infuriates Westsiders more than just about any other local problem.

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West Hollywood officials last year helped direct hundreds of residents' complaints to the federal government after Century repackaged its channels in such a way that it cost about $8 per month more to keep the same programming. Lawyer Pamela Koslyn filed her complaint, and since then has taken to scribbling nasty taunts on the bottom of her payment checks to Century. Other outraged residents cut off service altogether.

"I have never seen an issue that has more people more angry and enraged than cable," said Helen Goss, who oversees cable operations at West Hollywood City Hall.

The air was downright victorious March 7 when the West Hollywood City Council ordered Century to trim nearly $4 from its $24.08-a-month price for basic cable and to pay refunds back to the Sept. 1 start of the regulation law. Long-stewing residents, some of whom even brought cable bills to the session, applauded the unanimous vote as if the playground bully had been vanquished at last. The next afternoon, the Beverly Hills City Council ordered its own $1.68 rollback--to $22.40 a month--plus refunds.

Century executives plan to appeal the rate-rollback orders, saying the two cities overstepped their authority. Rates won't change until the appeal is decided.

Prompting all this is the Cable Television Consumer Protection and Competition Act of 1992, which reversed a 1984 law that had unshackled the cable industry from local regulation. Facing a clamor over rising cable rates and monopoly conditions across most of the nation, Democratic lawmakers turned cable regulation into an emotional election issue and overrode a veto by then-President George Bush, the only time Congress succeeded in doing so during his four years in office.

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The industry argued that the rates had paid for more and better programming and warned that regulation would leave it handcuffed as satellite and other technologies elbowed into the video market. If prices were unreasonable, asks Continental Cablevision Vice President John Gibbs, why did the number of Los Angeles subscribers double over five years?

The law, whose central goal was to lower cable prices by 10%, resulted last year in 500 pages of regulations from the Federal Communications Commission that set off a stampede for consultants who could decipher them.

Previously, cities and towns oversaw local cable operations through franchise agreements with operators, contracts that provide the communities a fee of 3% to 5% of company revenues. But cities had no say over rates.

Now communities can set rates for basic service using FCC-devised "benchmarks" that vary from system to system. Basic service includes over-the-air broadcast channels, plus public access and government channels. The FCC regulates satellite channels such as CNN or MTV. Pay channels such as HBO and Playboy and pay-per-view channels are unregulated.

The law also laid out strict standards for customer services, such as telephone-answering time or responding to outages. Before the 30-second federal standard took effect, Century had two minutes to answer the phone under its franchise agreement with Beverly Hills. While the law toughens standards, it still isn't clear what teeth it gives local officials who want to enforce them. Beverly Hills may soon consider fining Century for recent lapses in answering the telephone, but it would use its old franchise-agreement powers, not the new law.

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