Mixed Signals : Competition for Area Cable-TV Subscribers Heats Up as GTE Enters the Picture

One of the few communities in the nation where telephone and cable companies are vying for cable viewers, Thousand Oaks is beginning to see the impact that telecommunications competition can bring.

The city’s dominant cable system, TCI, said Friday it will not raise rates for about 32,000 subscribers in Thousand Oaks, although the firm announced this week a 7% rate hike for viewers nationwide. Moreover, TCI has offered rate discounts ranging from 5% to 15% to customers who agree to subscribe for extended periods.

Another firm with 4,000 local viewers, Falcon Cablevision, is seeking to free itself from city restrictions, arguing that competition from telecommunications giant GTE alleviates the need for government rate regulation.

The moves by TCI and Falcon come as GTE’s americast cable system makes its debut in living rooms across the city.

GTE has signed up about 1,600 cable subscribers since this past September, luring customers from both Falcon and TCI.

Although GTE is in the midst of a citywide construction project, company spokesman Mike Raydo said the firm is pleased with market penetration in areas where the new cable service is up and running, such as Newbury Park and Westlake.

“We’re getting a lot of calls from people asking, ‘When are you going to come in?’ ” Raydo said, adding that customers are pleased with high-tech options such as the company’s on-screen program guide.

Ed Shafer, a consultant to the city on cable issues, said consumers here are beginning to enjoy the benefits of last year’s sweeping overhaul of federal telecommunications laws.

The new laws freed telephone companies to offer cable services in their traditional markets and let cable companies seek exemption from rate regulation once competition emerged.

“Competition is the best form of regulation,” said Shafer, adding that TCI’s rate decisions reflect the impact of GTE’s presence. Ventura County is one of two cable markets nationwide where the telecommunications firm is offering cable services.

Dan Deutsch, general manager of TCI of Ventura County, stated in a letter to the city earlier this month that “due to the competitive situation in Thousand Oaks,” the firm will forgo the rate hike scheduled for this June.

He confirmed Friday that TCI plans no rate increase for Thousand Oaks subscribers, despite the forthcoming nationwide hike. TCI currently charges subscribers here $10.51 a month for its basic package of 21 channels and an extra $15.79 for an additional 31 channels.

“Quite frankly, we’re in a competitive situation, especially in the city of Thousand Oaks,” Deutsch said, adding that satellite television is another option for consumers. “We’re very concerned about the competition.”

Deutsch said TCI subscribers in Camarillo, another competitive market, also will not be hit with rate hikes. GTE has won a franchise agreement in that city and construction crews are working to install the firm’s cable system.

A decision on rates for areas in Ventura County where TCI does not face direct cable competition--including Moorpark, Fillmore, Santa Paula and Ojai--will be forthcoming, Deutsch said.

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Deutsch said TCI is becoming more sensitive to consumer wishes, pointing to the firm’s recent decision to bring back music channel VH1 after it was dropped from its program offerings. In Thousand Oaks, Deutsch said, TCI received hundreds of calls from disgruntled viewers.

Meanwhile, Falcon representatives, who have clashed with city officials and customers over rates and services, have filed papers with the FCC that argue cable competition from GTE makes regulation of Falcon’s rates unnecessary.

Falcon cut rates on several premium channels last year, but remains entangled in a complex dispute with the city over several rate hikes it has enacted in the past. Falcon now charges Thousand Oaks subscribers $22.45 for its basic package of 38 channels and 45 cents extra for its SatPac service of 12 premium channels.

Falcon Vice President Howard Gan said the company has responded to competition from GTE by laying fiber optic cable in Thousand Oaks, in an effort to boost picture quality.

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Gan acknowledged that Falcon will lose some customers as subscribers defect to newcomer GTE.

“Whenever you have a new guy on the block, the old guy is going to lose” some customers, he said. But, Gan added: “We think we can compete very effectively with GTE. We’ve been in the business a lot longer than they have.”

GTE is charging customers $10.95 for a basic package of 28 channels and an extra $16 for premiercast, which has 37 channels.

Raydo, the GTE spokesman, said the company remains confident that the affluent community of Thousand Oaks is an ideal market to launch new telecommunications services. The city’s many computer owners are asking when the company will offer the host of multimedia services--including high-speed cable modems and interactive TV--that many predicted would follow on the heels of telecommunications reform, he said.

Raydo said GTE needs to finish the groundwork for its cable system before it can move ahead with a broad expansion of multimedia services.

“I expect by the end of the year we’ll be completely up and running,” he said of GTE’s Thousand Oaks cable television service. “This is the first step.”

While cable customers in Thousand Oaks welcome the choice they now have for cable services, they also say price is only one factor.

Toula Colovos, for example, has criticized Falcon for its rate hikes and backed the city’s efforts to get the company to pay refunds to subscribers.

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GTE sales representatives have visited Colovos’ home, and Colovos said she was impressed. Nonetheless, she has stuck with Falcon, because it offers the Bravo channel. Bravo runs foreign movies she enjoys.

“I hate Falcon with a passion,” Colovos said, but “I love Bravo.”

Ken Allen, who recently switched from TCI to GTE, said he did so primarily out of curiosity.

“A good part of the reason is that they were the new kid in town,” Allen said, adding that he didn’t think TCI’s rate discounts were enough to stay.

Allen said he is happy with GTE’s on-screen program guide, a sophisticated system that allows viewers to scan for movies or shows they like with their remote control. He is happy so far, even though GTE is working to fix a glitch: The system, which allows viewers to program their VCRs by clicking selections on the screen, is not compatible with his Panasonic VCR.

“If I have problems,” he said, “I’ll switch back to TCI.”