Cities Consider Teaming Up to Regulate Cable Companies : Television: Action by firms in the wake of changes in federal laws has prompted an outcry from many customers.

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Responding to a jumble of changes in federal cable television laws, local governments are considering a plan to join forces to police the county's cable companies.

The move comes after cable companies earlier this month angered Ventura County residents by raising rates and jeopardizing basic network channels.

"Some people are really upset," said Steve Weingardt, general manager at Century Cable in Ventura. "I feel like I'm being attacked when what's happening is really because of changes in the law."

But local governments fear that cable companies are finding ways to circumvent the law and will continue to raise rates.

Under the 1992 Cable Act, passed by Congess last fall and implemented by the Federal Communications Commission, local governments have the right to impose strict customer-service standards and review cable company profit margins to make sure they are not overcharging customers for basic cable services.

When the new regulations went into effect Sept. 1, about two-thirds of the county's cable subscribers saw decreases in their bills, because the regulations mandated some price cuts and eliminated charges for extra outlets.

But as cable companies shifted channels from one level of service to another, some customers' rates increased.

At Century Cable, which serves about 15,000 customers in the city of Ventura, the rate for basic cable service jumped from $17.45 to $25.70. And Comcast in Simi Valley eliminated its $10.95 basic service, leaving only a $22.39 package.

One of the concerns local governments hope to address is whether cable companies can eliminate their lowest level of service, forcing consumers to subscribe to a more expensive package.

"People are not happy with the rate increases," said Ventura Assistant City Manager Carol Green.

Eight of the county's 10 cities are seeking FCC certification that would allow them to begin regulating their cable companies.

With certification, local officials would regulate basic cable service and equipment. This so-called first tier of service is made up of the retransmission of network channels broadcast from stations in Ventura, Santa Barbara and Los Angeles counties, public access channels and some specialty channels.

Prices for an upper tier of service--made up of the basic channels plus specialty channels for sports, news, religious stations and music or other programming--will continue to be controlled by the FCC.

Premium movie channels, including HBO, Showtime and Disney, and boxing matches and music concerts carried as pay-per-view events are not regulated.

Although cities are able to regulate basic cable rates individually, Green said pooling resources would keep down consulting costs. "It would be great to have this sort of consortium so we can get maximum benefit from the act."

The cities of Ventura, Thousand Oaks and Camarillo devised the plan for a cable consortium to reduce costs and beef up the clout of individual cities when dealing with the seven major cable companies in Ventura County.

The Thousand Oaks City Council is scheduled to consider the proposal Tuesday. The plan will then be sent for consideration to the county and its other nine cities, along with Agoura Hills and Westlake Village.

At least six cities need to approve the plan in order for the consortium to be formed, Thousand Oaks City Councilman Frank Schillo said.

"Small cities don't have the ability to hire high-powered consultants to help them," Schillo said. "If we band together, we'll all get more bang for our buck, particularly in lowering rates for our citizens."

Under the plan, the consortium would hire a consultant, most likely Tracy Westen, an attorney who provides legal services to the city of Thousand Oaks, Schillo said.

Initially, Westen would prepare an overview memorandum and hold a seminar open to government officials from participating cities to explain the Cable Act. If eight cities joined, each would pay $1,150.

Some cities say they are reluctant to join the consortium, fearing they will end up with unmanageable consulting bills.

"I don't like the idea of Fillmore, with 3,000 cable subscribers, paying the same as Thousand Oaks, with 24,000 subscribers," said Mike Houser, cable coordinator for Fillmore and Santa Paula. "Given the financial situation in both cities, we can't afford anything else right now."

Joe Hreha, deputy director of environmental services for Simi Valley, said the city would not join the consortium because the Simi Valley City Council hired its own consultant in August.

The revamped charges are only part of the problem facing local governments and cable companies.

The federal regulations that were intended to curb runaway rates charged by cable companies also granted broadcast stations the right to negotiate payment from cable companies, which have long carried their channels free of charge.

Some cable companies, which say they are already losing money because they have had to lower rates for many services, are refusing to lay out cash for the right to air network shows.

That means that cable customers looking for Jerry Seinfeld or David Letterman may find only a snowy screen if cable companies have not worked out deals with network affiliates by an FCC-imposed Oct. 6 deadline.

The cable companies argue that the networks make their money on advertising and that cable companies help them reach a bigger audience by carrying their stations to areas that would not be able to get them without cable.

Many residents in Ventura County, blocked by mountains from clear broadcast signals, rely on cable for any television reception. About 60% of the county's residents have cable.

City officials said they think the networks will give in at the last minute, rather than risk losing viewers and advertising dollars.

"It's all smoke," Schillo said. "Just imagine some corporate executive in New York saying 'No, we're not going to cover that area.' You can bet they'll come around. If they don't, it will affect their ratings, and ratings mean dollars to them."

But cable companies insist that the threat of losing network service is real.

"It's not in anybody's interest, but you can't say it's not a real possibility," said David LaRue, president of Cablevision, which serves about half of the county's cable customers. "Networks like CBS are just starting to realize that cable companies aren't about to start handing out cash when we're in the middle of a rate rollback."

Stephen George, general manager of the 10,500-customer Avenue Cable in Ventura, said it is likely that NBC and FOX will deny them broadcast permission.

"We've been trying really hard to work out a deal," George said. "But we don't have the bargaining power."

Meanwhile, some cable customers, fed up with bigger bills and the prospect of fewer desirable channels, are flooding their cable companies and city councils with complaints. Some are canceling cable and buying antennas or satellite dishes.

Since the rate changes went onto effect, Lonnie Umbenhower, who lives in a planned community in Thousand Oaks, is paying about $2 a month more for his cable service.

By decree of his homeowners' association, Umbenhower is not allowed to install an antenna or satellite dish. So for the past month he has been calling Cablevision weekly to complain about his rate increase and ask about future changes.

"It gets really frustrating," he said. "People like me really don't have much choice."

When a 15-year-old antenna at the Peppertree condominium complex in Ventura went on the blink, residents decided to dump cable and get a satellite dish.

With promises from 140 residents to sign up for service, a local satellite company outfitted the complex with three dishes and an antenna free of charge.

Residents pay $14 a month for 40 channels, a package that averages $20 to $30 through cable companies.

"It's a great deal," resident Wendy Olson said. "Everyone was having problems with cable and this has worked out really well."

In Port Hueneme, Elizabeth and Eddie Isnec are considering canceling their cable service to protest having to pay an additional $5 a month to get the cable channels they want.

"You really feel cheated, to the point where it's not worth it any more," Elizabeth Isnec said. "It seems hard to pay so much for something you're supposed to try not to watch so much."

Cable Alternatives

ANTENNA Cost: $100-$500, installed Access: Channels 2-13 and local access stations Benefits: No monthly fees Drawbacks: Does not include cable channels or pay-per-view. Some neighborhood associations and cities do not allow antennas.

SATELLITE Cost: $1,000-$4,000, installed, plus monthly fees for cable channels and pay-per-view Access: Up to 200 cable and international channels Benefits: Broader channel selection than cable Drawbacks: Does not include broadcast channels 2-13. Some neighborhood associations and cities do not allow satellite dishes. Source: Local antenna and satellite companies

FYI

Complaints about cable above the basic level of service can be made directly to the Federal Communications Commission. To file an official complaint, call 202-632-0004 and ask for form FCC 329. For a Spanish-language form, call 202-632-0100. Complaints about basic service can be made directly to city governments.

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