Century Bows to Ventura’s Order to Cut Cable Rate

A top Century cable official said Thursday that the company, embroiled in a legal fight in Ventura over allegations that it charges excessive rates, is poised to comply with a city rollback order to cut basic cable rates by $6.43 per month.

Bill Rosendahl, a representative of Century Communications of Southern California, said the company also is ready to agree that the city-ordered rate rollback be retroactive to cover the last 13 1/2 months--a deal that beginning in July would put $1.3 million back into the hands of Century’s 15,800 subscribers.

Not so fast, says the city, which during an ongoing review of Century’s monthly basic programming rates has suggested that rates should be scaled back even further--by at least an additional dollar per month.

Further, city officials contend, Century should be forced to reduce its hourly service rates from $21 to $18, and cut by one-third the installation rates it charges new subscribers with unwired homes.

The City Council would have to take another action to order a further rollback of rates.

City officials say Century agreed in May to the original rollback on the condition that the city discontinue further review of the company’s rates.

When the city refused to stop its review, the company filed a petition a week later asking the Federal Communications Commission to temporarily halt the rollback order.

Barring such a stay order from the FCC, Century this summer must institute the lower rates and issue $7.59 monthly refunds to its subscribers for a period of one year--a total of $91.08 per household, city officials say.

With the city’s ongoing rate analysis, however, city officials say Century’s rates may need to come down further.

“It does look to us that the rate they proposed is higher than it should be,” said Joe Van Eaton, whose Washington, D.C., firm, Miller-Van Eaton, has been retained by the city as it considers whether to renew Century’s 15-year franchise agreement to operate in Ventura.

The continuing rate dispute comes as Century and Tele-Communications Inc. negotiate to create a new corporation that would make Century the largest cable provider in Ventura County.

Although a formal, binding agreement between Century and TCI is still six to eight months away, the proposed deal--announced in December--would create a partnership giving Century 75% ownership and management control of all current TCI territory in Ventura County.

In all, the deal could affect more than 100,000 TCI and Century subscribers in Ventura County, and about 900,000 subscribers across Southern California, Rosendahl said.

It also would see the two cable giants trading territories in Northern California and the East San Fernando Valley, giving TCI a stronger foothold in the San Francisco Bay Area.

Such “clustering” agreements have been popular for the past five years, industry experts say.

They allow the companies to consolidate their markets, cut advertising costs and spend the savings on high-tech improvements.

City Warns the County

In the case of TCI and Century, company officials say, such an agreement also will allow both companies to transfer to the new venture company existing debt that is depressing company stock prices.

But although industry experts say such agreements can often benefit subscribers with improved programming quality and system capabilities, the city of Ventura has hoisted the red flag for county communities served by TCI.

The recent rate dispute in Ventura is the result of years of complaints from many of Century’s Ventura subscribers, who claim to be overcharged and underserved.

Beginning last fall, Century ignored three requests from the city to file FCC forms justifying those rates--the highest in Ventura County.

*

Instead, the company announced in March that it would raise rates by 6%, and filed a petition challenging the city’s rate-setting authority before the FCC.

“Century clearly has a monopoly on the eastern part of the city of Ventura, and it looks like with this partnership, they’ll now have a monopoly on almost the entire county,” said Ventura Mayor Jim Friedman. “I sure hope they conduct themselves countywide with a lot more integrity than they have conducted themselves in the city of Ventura.

“They have said one thing and done another. They have attempted to bully us, and if they have that type of attitude over the rest of the county, all I can say is, ‘County, watch out.’ ”

But Rosendahl suggested the company has had a change of heart.

“Tell the mayor that’s the past,” Rosendahl said when told of Friedman’s comments.

Century officials say the new venture will allow the company to spend $200 million to upgrade its infrastructure over the next three years, allowing the firm to begin offering more programming, high-speed Internet access, telephone service and perhaps even a 24-hour, CNN-style regional newscast.

‘It’s a New Century’

Rosendahl said he did not know what kinds of rates Century would charge TCI customers, but suggested the company may offer rates closer to the lowest-level basic package offered by TCI, which costs subscribers from about $10 to $13 per month.

“This is a new day and it’s a new Century,” Rosendahl said. “We are significantly growing and we are going to do a substantial amount of reinvesting into our cable plant for our subscribers, and we’re going to restructure the rates to meet the needs of those people in the region.”

The battle in Ventura is not the first time Century has come under fire for excessive rates.

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 in April, 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 totaled about $80 for each of the company’s more than 130,000 subscribers in Los Angeles.

Ventura Deputy City Manager Mary Walsh suggested that Century’s coming push for approval of the joint venture may be prompting the company to resolve its rate dispute in Ventura.

In coming months, officials for the new corporation will be asking for approvals from the cities of Camarillo, Fillmore, Moorpark, Ojai, Santa Paula, Thousand Oaks, Ventura and unincorporated areas where TCI and Century now hold franchises.

“Having that kind of outstanding issue is not a good position to be in as they go to the other cities in the county looking to transfer their systems,” Walsh said.

Van Eaton, the Ventura cable consultant, suggests Ventura and other communities be careful before approving the franchise transfer.

In past efforts to consolidate and save money, cable companies in some cases closed down customer service offices, forcing customers to drive outside their communities to pay last-minute bills or exchange cable boxes, Van Eaton said.

Cities negotiating franchise renewals such as Ventura face an even greater challenge.

Transferring the franchise from a previous provider to a new company effectively wipes the previous franchise holder’s slate clean, Van Eaton said.

*

That makes it more difficult to hold the operator accountable for past wrongdoing in the renewal negotiation process, and opens that community to a lawsuit if it denies a transfer request without just cause.

Meanwhile, by taking over TCI’s market, Century for the first time will face competition in Ventura County, namely that of newcomer GTE Americast, which already competes with TCI in Thousand Oaks and Camarillo.

Officials at GTE, which in its first 15 months in Thousand Oaks snagged nearly half of the city’s cable business from TCI, say they are not worried.

“This doesn’t really alter our strategy,” said GTE Americast spokesman Larry Cox, who said the company is gunning to be in 122,000 Ventura County households by the end of 1998. “We’re going to keep continuing on doing everything right and exceeding everyone’s expectations. They’ll do whatever they’re going to do.”