City Cable Pact Favors GTE, Lawsuit Says

As GTE extends cable television service to Ventura County’s largest city, Jones Intercable has sued Oxnard and GTE, alleging that the telecommunications giant is being allowed to operate with fewer costs and restrictions.

In a lawsuit filed in U.S. District Court in Los Angeles, Jones seeks to halt GTE’s construction project in Oxnard. Jones has 35,000 subscribers in Oxnard and operated without direct competition until GTE won a franchise agreement in May.

The suit alleges that Oxnard officials gave GTE Media Ventures a franchise agreement that is more favorable and less burdensome than Jones’.

It lists numerous costs and restrictions that Jones says it must bear in Oxnard that GTE has avoided in its deal with the city.

Those include spending thousands of dollars a year on the city’s public access system and complying with numerous city regulations.

Moreover, the suit accuses GTE of acting “to disrupt the contract between Jones and the City” and “seeking to harm Jones’ business.”

By granting GTE such an advantageous agreement, the city has breached its contract with Jones, according to the suit.

“Jones has and will be damaged through . . . being forced to compete while burdened with City-imposed burdens not imposed on GTE,” the suit states.

Steve Naber, Jones’ general manager, said that Jones wants Oxnard to award the company a franchise agreement “under the same terms GTE just received.”

Jones’ agreement with the city, signed 15 years ago, runs out in November.

*

Negotiations between Jones and Oxnard to renew the agreement have been underway for nearly three years but recently broke down, city officials said.

“We’re ready to compete with” GTE, Naber said. “What we’re concerned about is the added costs being placed on us that will end up going to our customers, not their customers.”

The lawsuit is the first such challenge to GTE in Ventura County, one of two launching points for the Irving, Tex.-based company’s $250-million cable television venture.

Last year’s sweeping overhaul of federal telecommunications laws enabled phone and cable companies to compete for television viewers.

GTE quickly entered the fray with a cutting-edge cable system that promises everything from a sophisticated on-screen programming guide to home shopping.

GTE is also installing its Americast cable system in Thousand Oaks, Camarillo and unincorporated parts of the county.

In Thousand Oaks, where GTE began offering its cable system last year, the company had signed up more than 8,000 subscribers by the end of May, luring customers from cable giant Telecommunications Inc. and Falcon Cablevision.

Without addressing Jones’ allegations, GTE spokesman Larry Cox called the competitor’s lawsuit groundless. He added that it is not expected to delay GTE’s construction plans in Ventura County.

“I think the citizens in Ventura County have shown us they enjoy having an alternative source of cable television,” Cox said. “We’ve been warmly received. Our plans are to continue.’

*

Oxnard officials, meanwhile, expressed surprise at the lawsuit.

Dennis Scala, an Oxnard management analyst, said city officials invited Jones representatives to sit in on the GTE franchise negotiations, but they refused.

While the city does not get many complaints about Jones, he said, a recent city survey showed that Oxnard cable viewers want more channels.

Like other Ventura County communities, Oxnard hoped that allowing GTE to compete would be good for viewers.

For instance, Scala said GTE promises more than 100 channels, while Jones offers about 55. Lower rates and more channels are what was expected of Jones--not a lawsuit, Scala said.

“I think competition makes everyone better,” he said. “We were hoping it would give Jones the incentive to improve, and we’d have two state-of-the-art systems instead of one.”

Scala said that GTE’s attorneys would represent the city of Oxnard in the matter.

In the lawsuit, Jones states that it spends thousands of dollars a year on public access television and other services in compliance with its own franchise agreement.

Those expenses include buying $65,000 worth of equipment to tape City Council meetings and providing free video training sessions to the public, according to the lawsuit.

GTE will contribute to public, educational and governmental programming, but with fewer requirements and costs, the suit states.

Also, the lawsuit states that GTE’s franchise agreement exempts it from the city’s cable ordinance, which allows officials to inspect Jones’ construction projects and review its records.

“There’s inherent costs associated with public access--the equipment, the resources made available to the community,” Naber said. “At some point, the dollars involved become a competitive advantage to someone who doesn’t provide it.”