Ventura Battles Cable Rate Increase With Report to FCC

Claiming the city’s largest cable television provider is a greedy monopoly forcing a steep rate increase down the throats of 15,800 subscribers, Ventura city leaders are asking federal regulators to rein in Century Communications Corp.

Filed Monday night, the city’s report to the Federal Communications Commission comes in response to Century’s own claim to the agency that the company is operating in a competitive market, even though city residents have no choice between Ventura’s two cable operators.

If successful, the company would thwart the city’s congressionally granted authority to police basic cable rates.

“Unfortunately, we’re dealing with the epitome of arrogance,” Ventura Mayor Jim Friedman said Tuesday, noting that federal law seems to favor the cable company.

“It looks like a David and Goliath situation,” Friedman said, “but the one thing we should all remember is, David did win, and that’s the attitude we have.”

Indeed, Century has lost such fights before. The FCC last November ordered the company to reduce its rates and pay several million dollars in rebates to subscribers in Beverly Hills, Santa Monica, Marina del Rey and other Southern California communities.

And on Tuesday, Century Southwest Cable Television Inc., a subsidiary of Century Communications, agreed to pay $12.3 million to Los Angeles subscribers and the city government to settle allegations that it charged excessive rates. The settlement amounts to about $80 for each of the company’s more than 130,000 subscribers in Los Angeles.

In Ventura’s case, it appears the argument will come down to whether the city has one franchise area served by two cable providers or two cable providers operating in separate franchise areas.

The distinction is critical because Century’s attempt to end the city’s right to justify basic cable rates largely depends on it.

Argument Revolves Around ‘Competition’

In its petition filed with the FCC on April 9, Century argues that it is operating under what FCC regulations define as “effective competition.”

Federal law maintains that “effective competition” exists when two cable companies operate in the same franchise area, the theory being that any cable companies operating within a designated franchise boundary could extend their cable lines and compete for subscribers if they so desired.

However, Ventura officials in their rebuttal petition contend that the city is broken into two separate franchise areas, not one, and, therefore, the effective competition argument is moot.

“The real crux of this is in the boundaries,” said Mary Walsh, an assistant to the city manager who acts as the city’s point person in cable franchise matters.

In its argument before the FCC, the city attempts to bolster its case by citing cable company service area maps, testimony of current and former city officials and a statement allegedly made by Century officials in December.

The only service area map provided the city by Century came in 1982, and it makes no reference to the existence of two separate franchise areas.

Avenue Cable, however, refers specifically to a “franchise boundary” line in one 1983 map, and a “franchise divide” in a 1990 map.

George Franciscovich, vice president for legal affairs in Century’s Connecticut headquarters, said the company’s territory under its franchise agreement is the entire city. Therefore, he said, there is only one franchise area in Ventura, not two.

Franciscovich said the company’s decision to request that effective competition be declared in Ventura came only after the city for the first time required the company to review its rates.

FCC precedent, he said, is clearly on the company’s side.

“This is not the Webster’s Dictionary of competition,” he said. “This is a definition established by Congress. A lot of people misconstrue that. As lawyers, we’re looking at what the statutes and regulations say.”

The recent dispute has been brewing for years, with the city fielding numerous complaints from Century subscribers about poor service and astronomical rates that often are the highest in the county.

With the company’s 15-year franchise agreement set to expire Oct. 1, city officials in January began asking Century to send the necessary paperwork justifying the $31.50 monthly basic service rate subscribers had been paying.

On three occasions between January and March, the city asked Century to send the necessary paperwork justifying the company’s basic cable rates. The company ignored each request.

Then, on March 30, the company announced plans to increase its monthly basic cable rate to $33.39, far above the $25.07 rate city reviews suggest Century subscribers should be paying.

By last week, the company filed its petition with the FCC asking the federal agency to declare effective competition in Ventura.

Company, City Fight Over Control

The company claims not only that it is technically in competition with Avenue TV Cable, but that the ability of citizens to subscribe to satellite television service or even install rooftop television antennas constitutes competition under FCC statutes.

If the FCC rules in Century’s favor, the company would be exempt from future city rate regulation.

“Century’s belated rate filing not only illustrates the company’s cavalier disregard of the commission’s rules, but also brings into sharp relief what is at stake.

“If the commission were to accept Century’s claim of effective competition, despite the absence of any real competitive choice for subscribers in the city, the result would be to impose on Century’s subscribers an overcharge of at least $8.32 per month per subscriber,” write attorneys for Miller and Van Eaton P.L.L.C., a Washington, D.C.-based law firm hired to represent the city in the complex cable television proceedings.

“Such a result would fly in the face of the congressional mandate to ensure that rates are reasonable and to prevent evasions.”

Meanwhile, Century on April 2 filed a separate petition with the FCC seeking to temporarily prevent the city from ordering the company to lower its rates.

City Atty. Bob Boehm said thatbarring a ruling from the FCC, the City Council will likely go forward with a planned public hearing on the rates scheduled for April 27.

Afterward, the council is expected to use its congressional authority under the 1992 Cable Television Consumer Protection and Competition Act and consider lowering Century’s basic rates to $25.07.

City leaders also say they plan to forward to the FCC the hundreds of letters and phone messages left on a special hotline set up at City Hall.

Mayor Friedman said he and other top city officials recognize that the city faces an uphill battle, but that City Hall must stand up for its citizens.

“The City Council believes that the residents of their city are paying too much for Century cable television,” Friedman said. “We’re bound and determined to do something about it.’

FYI

The city of Ventura has a special cable hotline to field comments and complaints from cable subscribers. All comments regarding the current dispute with Century Communications Corp. will be forwarded to the Federal Communications Commission. The hotline number is 677-3944.