San Diego Takes Step Toward Increasing Cable TV Competition
Taking the first step toward opening San Diego cable television to competition, a City Council committee Wednesday agreed to solicit bids from potential rivals of Cox Cable San Diego and Southwestern Cable TV.
The Public Services and Safety Committee’s 4-0 decision, which must be approved by the full council, might eventually mean that some or all city cable subscribers would have a choice of cable companies, along with lower prices and a wider variety of offerings, proponents claim.
“This is a consumer issue par excellence, " said Councilman Bruce Henderson, the main council backer of competition among cable companies. If city viewers reaped the $8 reduction that some Chula Vista and National City consumers receive from competition in those cities, “that’s millions and millions of dollars a month,” he said.
Moreover, Henderson claimed in testimony before the committee, competition might spur cable companies to provide “a fiber-optic freeway of information” to city homes.
But competition also could thrust the city into the complex world of “overbuilding"--the term used for allowing rival companies onto the same turf--and the difficult choices that the city could face as a result.
Deputy City Manager Coleman Conrad warned the council in a report that it could expect complaints from viewers where lower prices are not available and grousing if a new cable company put in duplicate cable boxes and tore up streets to install its own cables.
Rival companies rarely survive for more than a few years, according to the report. In a 1987 survey, only 11% had survived for three years or more, Conrad’s report noted. Dual systems create pressure for one company to sell out to the other or forces rates up, the report warned.
“I want to make sure that, no matter what we do, we have competition,” said Councilman Ron Roberts, who joined council members Wes Pratt, Judy McCarty and Linda Bernhardt in voting to solicit the proposals. Councilman John Hartley was absent.
Southwestern and Cox now have non-exclusive franchises for the northern and southern halves of the city, respectively. Southwestern serves 145,000 customers north of the San Diego River, charging $19.34 monthly for basic cable services. Cox serves about 147,000 San Diego residents south of the river at $19.95 monthly.
But, in some sections of Chula Vista and National City, Chula Vista Cable serves about 5,000 customers at $11.85, providing a better picture and a wider variety of channels, according to Martin L. Altbaum, the company president. Cox has dropped its price to the same level for homes nearby, creating a situation in which some Chula Vista homes on the same block pay vastly different monthly prices, Altbaum claims.
Altbaum is suing Cox in federal court for antitrust violations.
Cox and Southwestern officials testified Wednesday that they welcome competition, but Robert McRann, Cox’s senior vice president and general manager, warned against the city allowing “cherry picking"--a practice whereby companies wire cable to lucrative, densely packed clusters of homes and apartments but neglect other areas.
A state law enacted in 1989 requires new franchisees to “wire and serve the same geographical area within a reasonable time” without discriminating against poor or minority households. Cox and Southwestern told city officials that they believe subdividing their franchise areas would violate that state law and could produce a costly legal battle, according to Conrad’s report.
In an effort to guard against cherry picking, the committee agreed to require new cable companies to say how long it would take them to wire the entire franchise area.
As part of Wednesday’s vote, the committee recommended that the council lobby the state Legislature to allow competition in smaller zones or seek federal legislation preempting the state law. Also, the committee recommended that the council ask the Federal Communication Commission to change a rule to allow cities more authority in setting rates.