5 Cities Unite to Negotiate With GTE

Communications giant GTE is finding that in the Ventura County cable TV market, it takes more than size for success.

The telephone company is having to negotiate a maze of issues with local governments from Thousand Oaks to Oxnard before it can compete with the monopolistic local carriers.

“Competition is good for the community,” Oxnard cable analyst Dennis Scala said. But, he added, regulating the cable industry is “very, very complicated.”

The five cities that GTE wants to wire are worried about their roads, decreasing tax revenues and traffic congestion caused by the construction of the cable system.

Toss in a well-earned wariness of dealing with financially powerful cable companies, and these five cities--which have to approve GTE’s $41-million project within their respective borders--have decided to seek safety in numbers by forming a single negotiating consortium.

“It has never been easy dealing with cable companies,” Santa Paula City Manager Arnold Dowd said. “Cable companies pretty much have done what they wanted to for a long, long time.”

Four years ago, Congress gave cities the right to regulate cable rates. But nearly every rollback ordered in Ventura County has been fought by the cable companies, armed with high-priced attorneys and lobbyists.

But on Monday morning, Dowd will join colleagues from Camarillo, Port Hueneme, Oxnard and Thousand Oaks in an attempt to get what they want this time from a cable television company.

The initial negotiating session between the consortium and GTE officials is scheduled in Thousand Oaks. GTE hopes to begin laying fiber optic cable in Ventura County in the next year and provide cable television service.

“What concerns us is the tearing up of all the roads,” said David Hartsuck, an Oxnard public works engineer. “We just completely redid and repaved many miles of city streets.”

Camarillo Assistant City Manager Larry Davis said the consortium is also concerned about a loss in tax revenue. Each city charges cable television providers a yearly franchise fee to operate. But under current law, GTE would not be required to pay the fee because it is a telephone company.

What’s more, because the franchise fee is based on revenue, city officials fear that competition from GTE will lower revenues of the other cable providers and thus lower the cities’ share of the proceeds.

And because no cable company in Ventura County has ever faced competition, no one is certain how many cable customers will use GTE as their sole television provider. Scala roughly estimated initial losses to be between 10% and 20% of the $550,000 the city collects each year from Jones Intercable.

The cable companies like this provision even less than the cities.

“We are not opposed to competition,” Pam Drake of Avenue Cable in Ventura said. “But we want a level playing field. We’d like to see legislation passed that addresses some means of [GTE’s] paying the same fees.”

GTE argues that it shouldn’t have to pay the same fees because it won’t function as a traditional cable company. Instead of offering a package of programming at a set rate, GTE will offer a menu of options and require customers to pay for each special program they watch.

“There will be niche channels such as a cooking channel,” GTE spokesman Mike Raydo said.

The cities also wonder what impact the construction will have on traffic, as well as what GTE is willing to provide to the community. Currently, cable providers are required by law to give community access channels to each city. Like the franchise fees, though, that requirement does not apply to telephone companies.

In the end, the city officials believe the competition will ultimately pay off in lower monthly cable bills with more channels being offered.

“I think, overall, it is good for the community,” Scala said.

Staff writer Eric Wahlgren contributed to this report.