Beverly Hills Threatens to Unplug Cable Firm

Beverly Hills has told a cable television company that it must sign a new agreement within two weeks or lose the city’s cable franchise.

The City Council on Tuesday agreed to delay a decision on transferring its 9,000-subscriber cable system from Group W Cable Inc. to its new owner, Century Southwest Cable Television Inc., to give Century time to review the city’s conditions.

The city wants Century to spend $875,000 on improvements and to deposit $4.5 million to be used in case the company cannot pay for the improvements. Council members made it clear to a Century representative attending the meeting that the Connecticut-based company must agree to the terms and sign the agreement by the council’s Feb. 3 meeting.

‘Tired of Fooling Around’

“If these documents are not forwarded within the next two weeks, then we are not going with Century,” Councilman Robert Tanenbaum said.

“We’re tired of fooling around,” said Vice Mayor Benjamin H. Stansbury Jr., who said discussions with Group W about improving the service go back to 1983.

Stansbury said the city could chose a new cable company or consider running the franchise itself. “We either get a deal or we walk right over them like they weren’t there.”

Bill Rosendahl, Century’s vice president for corporate affairs, said after the meeting that the company had received the city’s proposal only last week and that its lawyers need time to review it. He said he did not know when a decision would be made on the city’s financial demands.

Century has been running the city’s cable franchise since last year when it joined four communications companies to buy Group W in a $2.1-billion deal with Westinghouse Electric Corp. The company wants the city to renew the franchise agreement and to transfer ownership of the cable system to Century.

The council refused to renew the agreement and approve the transfer last year after a consultant and the city’s Cable Television Advisory Committee said Century failed to show that it could afford to rebuild the cable system.

Letter of Credit

Under the proposed agreement, Century would be forced to give the city a $4.5-million letter of credit and provide $875,000 in new television equipment or cash. Beverly Hills also required that Century and its creditors agree to turn over the franchise’s assets to the city if Century is unable to pay its debts.

City officials said they added the financial guarantees because they were not sure that Century could operate the franchise while servicing its debts. Officials said that Century owes $390 million to several banks for its share of Group W.

Harold E. Horn, the city’s cable television consultant, said his concerns about Century’s ability to rebuild the cable system would be resolved if Century and its creditors agreed to abide by the guarantees. He said, however, he is not yet satisfied that Century is capable of running the franchise.

“We have not yet been shown how Century plans to meet its extensive debt obligations, new acquisitions, new operational costs and refranchising obligations,” Horn said. He advised the city to require Century to certify that it could operate the franchise without a “significant” increase in subscription rates, which were recently deregulated by the federal government. Century officials did not say if the company will increase the rates.

The city wants Century to increase the system’s channels from 29 to 60 and give the city the option of requesting a total of 75 channels.

Public Access Station

The company would also have to provide a public access television station and guarantee other improvements for the cable system.

Cable television subscribers in Beverly Hills pay $10 a month for basic service, plus $2.75 for the channel selector. One of the city’s six pay channels costs an extra $13.95 a month and $11.95 for each additional pay channel. The city’s cable system includes an educational station run by the Beverly Hills Unified School District and a municipal station that broadcasts city meetings and cultural programs. The city’s public access channel is operated with Santa Monica.