S.D. Urges Rivals to Bid to Provide Cable TV Service : Competition: City Council hopes competition will mean better selection and cheaper rates for customers.

Seeking lower rates and wider channel selection, the San Diego City Council Monday invited rivals of the Cox and Southwestern cable companies to compete for a chance to serve the city’s 300,000 cable TV customers.

The 8-0 vote on a program championed by Councilman Bruce Henderson came with little council discussion and no dissent.

“What this can mean for our consumers is a savings of up to $8 a month,” Henderson told the council. “Down in Chula Vista, the people who have competition on their block are saving $8 a month and getting better service.”

Monday’s council decision could bring competitors into some San Diego neighborhoods as soon as a year after a proposal is accepted by the city, said George Story, a management assistant to City Manager Jack McGrory.

Under terms calling for a company to wire an entire franchise area in a “reasonable” period of time, a new company could provide cable service to half the city within 10 years, Story said.

Southwestern Cable TV and Cox Cable San Diego 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 homes at $19.95 monthly.

But in some areas of Chula Vista and National City served by a small, rival company called Chula Vista Cable, 5,000 homeowners pay just $11.85 for a wider variety of channels and a better picture, company president Martin Altbaum contends. 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 very different monthly prices, Altbaum claims.

Altbaum said he is considering a bid to provide competition in San Diego. Story said representatives of other cable companies have called seeking information.

Deputy City Manager Coleman Conrad, who will oversee the “request for proposals” from potential rivals of the two companies, said that the city will impose no deadline on accepting bids to maximize the chances of receiving a bid. The document also asks companies to suggest ways of incorporating new cable technology such as fiber-optic cables that can carry considerably more information.

“We’re just making a good-faith effort to see if we can stir up some competition,” Conrad said.

Known as “overbuilding,” competition for cable television franchises has increased around the country in recent years, according to Multichannel News, a trade publication cited by Henderson.

But allowing companies to compete for the same turf is fraught with difficulties. In a January report to a council committee, Conrad warned the council to expect complaints from viewers where lower prices are not available and grousing when new companies tear up streets or install duplicate cable boxes.

Small companies rarely survive for long against their larger, established competitors, the report notes. In a 1987 survey, only 11% had survived for three years or more.

A state law enacted in 1989 requires new franchises to “wire and serve the same geographical area within a reasonable time” to prevent rivals from providing service just to densely packed, more lucrative neighborhoods.

But Councilman Wes Pratt said Monday that legislation has been introduced in the state Assembly to allow cable wiring of smaller geographic areas.