4,000 May Get Refunds on Cable Rate

More than 4,000 cable television subscribers in Thousand Oaks could receive refunds due to a recent FCC finding that the rates Falcon Cablevision has been charging since July 1994 are too high.

The FCC has sided with city officials who twice had ordered Falcon to lower its basic service rates. Both times the cable provider appealed, and the federal ruling largely denied the appeals.

The FCC ruling bolsters the position of the City Council, which on Tuesday is expected to adopt a third resolution ordering Falcon to roll back its basic monthly service rate from the current $24.45 to $19.09.

But this latest difference over rates can be traced back to the first rate dispute between the council and Falcon in March 1995.

“Everything goes back to the first appeal,” said Ed Shafer of CTIC Associates, a cable consulting company hired by the city. At the time, the city determined that Falcon’s basic rate should be $16.69, not the $20 that Falcon charged customers. Since then Falcon has raised its basic service rate twice--to $21 in July 1995 and to $22.45 in August.

“We have had little difference with Falcon over the amount of the increases,” Shafer said. The issue is whether the initial rate, on which the hikes are based, should be $16.69 or $20, he said. “The FCC has ruled on those differences, and in large part has sided with the city’s position,” Shafer said.

Falcon officials said Friday they are still analyzing the FCC ruling and plan to continue offering cable service in Thousand Oaks.

“We are still looking at the report,” said Emerson Yearwood, a Falcon executive. “I don’t think this is a major setback.”

In a further twist to the Falcon rate saga, the company had notified customers earlier this year that it planned to hike its basic rate again, effective Oct. 1, to $25.58. But in view of the FCC ruling, the company has postponed that rate increase until Dec. 1 and may withdraw it altogether, said Caroline Milton, the city’s media services coordinator.

Falcon, whose basic service includes 38 channels, has come under fire from residents for its high prices and poor channel offerings, Milton said.

Critics have complained that Falcon’s basic service is too costly for many customers.

In comparison, TCI of Ventura County, which with more than 32,000 customers is the city’s largest cable provider, has a basic rate of $10.51 for 21 channels, and GTE, which two weeks ago began offering cable service in areas of Newbury Park, is charging $10.95 for 28 channels.

And in their overall programming selections, TCI and GTE offer more channels than Falcon at a lower rate, Milton said.

On Tuesday, the council is scheduled to consider a resolution limited in scope to the current rates that have been in effect since Aug. 1.

In a memo to the city manager, Milton recommended that the council approve a resolution setting the basic service rate for Falcon at $19.09.

The council is expected to follow that recommendation.

“In terms of the Falcon Cable review, I am going to support the staff recommendation regarding the prices,” Councilwoman Elois Zeanah said. “I am really opposed to Falcon being allowed to charge more than the other cable companies yet provide fewer channels. This is not fair to the 4,000 people that currently subscribe to Falcon. The public is being shortchanged, and I think we should have equivalent services for equivalent money.”

Both Councilman Mike Markey and Mayor Andy Fox agreed.

“Falcon is a problem,” Markey said. “Most of the complaints we got from the users is that rates are too high.”

The larger dispute between Falcon and the city--dating back to July 1994--will take some time to resolve.

“The city and Falcon have to take a look at what the FCC has decided,” Shafer said. The basic rate effective July 15, 1994, will have to be set somewhere between the $16.69 initially determined by the city and the $20 that Falcon set, he added.

While the city rulings mandating lower rates were being appealed, Falcon was authorized to charge the higher rates, Milton said. But the FCC order may result in rate reductions and refunds to Falcon subscribers, she added.

The exact rates and amounts of any refunds would be set after discussions between Falcon and city officials, which are scheduled for next week.

The council will then have to adopt a new resolution to set rates.

Falcon may soon face increased pressure to lower prices in the form of competition from GTE. Eventually, the telecommunications giant is planning to offer cable service throughout Thousand Oaks.