City Council Panel Backs Higher Cable TV Fees

A Los Angeles City Council committee on Tuesday recommended a substantial fee increase and extensive new service requirements for cable television companies when their franchises come up for renewal in 1987.

Officials said the proposed increase, from 3% to 5% of gross revenues, would boost city cable revenues from $2.1 million to at least $3.5 million. Cable companies, officials said, would probably pass the increase on to consumers.

One recommendation approved by the council’s Industry and Economic Development Committee would require cable companies to set up a system to televise City Council meetings throughout the city, just as congressional sessions are televised by the Cable-Satellite Public Affairs Network (C-SPAN).

Tougher City Attitude

The proposal appears to reflect a tougher city attitude toward the 12 companies that hold city franchises, some of whom have been criticized for providing poor service.

It marks the beginning of a new stage of a long municipal controversy over cable systems, which must be franchised by the city. The first stage ended in 1983 with the completion of franchise awards. This stage will involve a push by the city for improved services and higher revenue led by the new Department of Telecommunications, formed in 1984 to improve cable regulation.

Susan Herman, the department’s general manager, said the aim of the proposal is to assure good service in both wealthy and poor areas. Cable regulators have complained that service varies in each of the cable systems. In East Los Angeles, the franchise holder is being threatened with franchise revocation because of poor service, officials said, and the firm awarded the South-Central Los Angeles franchise has never built the system.

“The reason the city is doing this is that it wants to assure that no matter where you live, Watts or Westchester, you have the same quality of service,” she said.

Firms Oppose Rate Hike

Cable companies opposed the proposed rate increase in the committee and are expected to continue opposition as the measure goes before the council. Cable companies, major contributors to City Council campaigns, were influential in fights over franchise awards and are expected to use the same clout in the writing of the franchise renewal law.

But, officials said, the companies can easily raise consumer prices to pay for the fee increase. A 1984 federal telecommunications law gave cable companies around the country the right to raise subscriber rates 5% a year for the next two years. After that, they become deregulated and can charge whatever they want.

One of the major requirements was backed by Industry and Economic Development Committee Chairwoman Joan Milke Flores. It would give “priority status” to creation of a citywide cable network, connecting all the systems.

An aide said one reason Flores wanted such a network was so city meetings could be televised citywide, including council meetings and committee sessions. A city television studio would be built in the Civic Center area under the plan.

Systems would also be required to have at least 60 channels, substantially more than now offered by some of the systems.