Despite Claim, Cable-TV Plan Still in Knots

Despite an elaborate and highly publicized ground-breaking ceremony last month, United Cable Television of Los Angeles has yet to build the first mile of the already delayed 1,140-mile East San Fernando Valley system.

“They’re way behind” schedule, said Dave Talcott, an engineer with the Los Angeles Department of telecommunications, which regulates cable TV.

United officials blamed the latest construction delays on the city’s failure to approve their request for a 10-year franchise extension. The franchise was granted in September, 1983.

$6 Million Invested

Company officials said they don’t want to invest much more of the company’s funds in the $60-million system because the franchise, which expires in 1987, doesn’t give them enough time to make money. The company has invested $6 million in the system “in good faith” without assurance of a profit, United President William Cullen said.

“United is working hard under the circumstances . . . but could proceed even faster to complete the system” if the city would approve the franchise extension, United attorney Mark Ambruster said last week.

The city’s citizen-run Board of Telecommunications on March 29 recommended approval of the franchise extension to the City Council. But Susan Herman, who became manager of the Department of Telecommunications on April 1, has held up the paper work in her office because of unspecified concerns. The previous department manager had recommended against extending United’s franchise without knowing how well the company would provide service.

First Day, First Mile

At the ground breaking last month, United officials said they would build the first mile of the system that day and more miles in following days.

But when asked last week how many miles had been built, Cullen said “none.” The company did install 440 feet of cable along a section of Copper Street in Mission Hills, where the ground breaking was held.

Asked if the company is deliberately stalling, Cullen said, “We’re managing our investment.” He denied ever saying that the company expected to complete the first mile on the day of the ground breaking.

Cullen said that although United has not started construction, it has continued to work hard on other aspects of the project, including obtaining approval to string cable on utility poles.

No Opinion on Progress

Herman said she has not formed an opinion on whether United is working as fast as it could.

United, meanwhile, faces a city-imposed June 30 deadline for building the first 50 miles of the system before an initial penalty of $150,000 is assessed plus a $300 fine for each day of delay. A proposal to increase the fine to $500 a day is scheduled to go before the City Council this month.

Company officials say--and city staffer Talcott agrees--that it is possible for United to meet the deadline. Even if it does, United officials say it will be September at the earliest before the first East Valley residents receive cable service.

The East Valley system was supposed to have been completed by the end of this year. The City Council in December granted United’s request for a 10-month extension until October, 1986, to complete the system. In doing so, the council established deadlines for completion of the system, with financial sanctions if United fails to meet them.

West Valley Rates Raised

In a related development, Valley Cable TV, which serves the West Valley, has raised its basic rate from $10 to $12 a month, taking advantage of a state deregulation law allowing it to charge as much as it wants without public hearings or city approval. The new rates went into effect Wednesday.

The firm has sent letters to its 51,172 subscribers advising, “Increased costs in providing your existing basic services necessitated a price adjustment.”

It is the first rate increase since the company began operations in January, 1982.

In addition to the increase in the basic rate, Valley Cable changed the price structure for its “premium services,” such as Home Box Office, Showtime and the Disney Channel. Under the old pricing structure, the monthly rate was $12.95 for the first premium service, $11 for the second, $6 for the third, and $10 for each additional service.

The company now is offering package discounts for premium services. A subscriber who previously paid $33.95 a month for basic service along with the Disney Channel and HBO will now pay $34.95 a month for the same service. Taken individually, HBO, the Disney Channel and most of the other premium channels will now cost $12.95 a month.

Companies under city regulation are required to document a financial need for rate increases. Before the 1979 deregulation law was approved by the state Legislature, cable operators complained that it took cities a year to decide on rate increases, thereby denying companies adequate funds to operate their systems in the interim.

Valley Cable, contending that it has met the requirements of the state law, notified the city April 10 that it was filing for rate deregulation. Two other cable firms--King Video, which serves Sunland-Tujunga, and Group W, which serves the Santa Monica Mountains area--have also filed for deregulation.

Under a law adopted by Congress five years after the state law, all cable companies will be deregulated at the end of 1986 without meeting any requirements.

The state law gives cities the right to challenge the deregulation in court if the cable company is not in substantial compliance with its franchise, Talcott said. He said his department has not recommended to the City Council whether Valley Cable’s action should be challenged.