Regulation of Cable TV at Issue in Santa Ana

Despite being a natural monopoly, cable TV has been poorly regulated by local government. As chairman of Santa Ana’s Cable TV Advisory Board (appointed by the City Council), my fellow board members and I have been powerless to stop basic rates (for about 50 channels) increasing from $6.95 a month to $17.95 a month in the past 5 years. This dramatic increase in rates is directly related to deregulation of the cable TV industry resulting from the Cable TV Act passed by Congress in 1984.

Since it purchased the Santa Ana system from Group W in 1987, Comcast has been trying to renegotiate its franchise agreement with the city. The third largest cable TV vendor in the world proved to be a tough opponent for a part-time City Council. Without reading the proposed settlement, the local politicians traded the best interests of their constituents for “putting this issue to bed.”

Through aggressive lobbying and political campaign contributions, Comcast successfully breached its contract with Santa Ana. The Cable TV Advisory Board had unanimously rejected the city manager’s proposed settlement in advance of the City Council vote.

Not only did the city give up a $2 million TV studio, control of local origination programming and interconnects with other cities, the city of Santa Ana is implicitly and explicitly stating that it is unwilling to go to court to enforce its franchise agreement. Instead, those members of the City Council (John Acosta, Ron May, Miguel Pulido and Dan Griset) who voted not to enforce its contract with Comcast have sold out its citizens.

The only issue in this dispute was: Is the franchise agreement an enforceable contract? If this agreement is valid, the city has a duty to enforce it. The cities of Huntington Beach, Fountain Valley, Seal Beach and Westminster have recently received $10 million for amending their franchise agreement. Santa Ana received nothing except items that Comcast was already contractually obligated to provide.

The City Council has turned its cable TV contract into a worthless piece of trash. No other city has concluded that franchise agreements are meaningless. Ultimately, it is the people of Santa Ana who will suffer and bear responsibility. After all, they elected these lightweights to office.

MITCHELL DAVIS

Irvine

Mitchell Davis is chairman of the Santa Ana Cable TV Advisory Board .