Santa Monica Ends Pact With Cable TV Firm

The Santa Monica City Council has voted to terminate its franchise agreement with the city’s only cable television company.

However, officials for the city and Century Southwest Cable Television Inc., the firm currently managing Santa Monica’s cable franchise, said they do not expect any change or disruption of service.

Agreement Breached

The unanimous council vote came after Deputy City Atty. Laurie Lieberman told the council that the city’s agreement was breached when Westinghouse Electric Corp. sold the stock of its nationwide Group W cable subsidiary to a group of five communication firms in June without getting the approval of the city.

Lieberman said the city’s franchise agreement requires council approval of the transfer before the franchise can be sold.

Century, which is one of the five purchasing firms, is managing the city’s system for the jointly owned holding company. Century plans to purchase complete control of Santa Monica’s cable system when a second stage of the sale is completed next year.

Lawyers for Group W Cable and Century said their companies had interpreted the franchise agreement to mean that they did not need to get the city’s approval for the sale until Century was ready to take full control of the system, which will be sometime next year.

“In this case we came to the interpretation that we did not require the consent (of the council) on the sale of the stock,” Day Patterson, chief counsel for Group W Cable, told the council.

In urging the council to maintain the franchise agreement, Patterson said a vote to terminate the contract may wind up in court. “We both know that litigation is expensive,” he said.

The council also approved Lieberman’s recommended termination date of Dec. 13, 1987, just one month short of the expiration date for the franchise agreement.

City manager John Jalili said terminating the contract just one month short of its expiration is necessary because the city needs time to prepare for a new round of bidding for its cable television rights.

“A lot of preparation is needed to see where the city goes from here,” he said. “The decision could not have been put off until the bitter end. We could not have waited until (the franchise) expires.”

Jalili said the city’s cable franchise was transferred once before without city approval when Group W purchased Theta Cable of California in 1982, and “it was important to let both Century and Group W know the city’s concern about the transfer.”

Lieberman and Jalili have also said Century was not cooperative in complying with requests for information on the company’s financial status. “We were concerned about the absence of information and whether the (financial) capacity was there to serve our citizens,” Jalili said.

Andrew Tow, director of corporate affairs for Century, told the council that his company wanted to cooperate with the city and “intends to upgrade the system to a capacity of up to 60 channels. We will upgrade immediately following renewal of the franchise,” he said.

Santa Monica’s cable television system is capable of carrying up to 29 channels.

But Councilman David Epstein, who made the motion to terminate the franchise agreement, said, “I think the staff report . . . and tonight’s testimony is adequate record that there is a breach of the city’s agreement. This is an appropriate action.”