Santa Ana Cable TV Fees to Rise Despite Opposition by City

Basic cable television rates in Santa Ana will increase 33% starting March 1 as a result of the city’s refusal to renegotiate its cable contract, Comcast Cablevision officials said Tuesday.

In a letter to its 24,700 affected subscribers announcing the increase from $13.50 monthly to $17.95, Comcast called the city’s contract requirements “grossly unfair and wasteful.”

But Santa Ana officials Tuesday said the contract issue is a bogus one and that Comcast is looking for an excuse to raise rates to increase profits. The city has no plans to renegotiate the agreement, they said.

Comcast “knew full well what the contract called for in the way of performance” when it bought the Santa Ana franchise along with others from Group W cable company in 1986, City Manager David Ream said. “We believe they are just trying to make a better deal for themselves.”

Comcast officials said Tuesday that they considered the Santa Ana contract a “dog” when they acquired it but assumed they could renegotiate it. The assumption, they said, was based on similar situations elsewhere in the country.

At issue in the contract, according to Comcast Vice President James Bequette and other company officials, are requirements that the company:

- Pay for and equip a $2-million studio to be used by the city for cablevision production.

- Pay a $468,000 annual fee to the city to cover the cost of programming produced by the city or its contractors.

- Pay for in-house networks for city agencies that Comcast refers to as expensive “experimental projects.”

- Create connections for cable networks with neighboring communities and area colleges.

Bequette said any studio work that Santa Ana officials want to do can be done at two other studios operated by Comcast in Orange County. He said Comcast already has given Santa Ana more than $1 million in production equipment to make broadcasts from City Council chambers and other productions.

The $468,000 annual fee, he said, far exceeds the cost of similar programming in other cities. In Comcast’s North Orange County group, comprised of Fullerton, Buena Park and Placentia, Bequette said, the annual cost of that programming is less than $100,000.

“We can do (programming for Santa Ana) for a lot less than $100,000 and do a lot more of it,” Bequette said.

Given that the city has refused to renegotiate the terms, Bequette said, Comcast was “left with no other recourse except to raise its rates to make this system viable financially.”

City Atty. Edward Cooper questioned the reasons for Comcast’s rate increase, since the company has not met the contract’s requirements to date.

‘No Expenditure of Funds’

“There has been no expenditure of funds” other than the payment of a 5% franchise fee, Cooper said, “so I don’t understand their assertion.”

Maureen Whalen, an attorney for Comcast, conceded that the company has not honored much of the contract but said the increase was necessary in case it had to do so.

“What we need to start doing is collecting that money in case the payment has to be made,” she said.

Comcast officials estimated that the franchise lost $4 million in 1987. Whalen said a “much smaller” rate increase to cover higher operating costs probably would have been instituted later this year.

Still pending, Bequette said, is a lawsuit that Comcast filed against the city last month after the city fined the company for failing to honor the contract. The fine hasn’t been paid, city officials said.

Bequette said Comcast has offered to negotiate a settlement in that suit.