Cable rates probed

Councilwoman Toni Iseman grilled a Cox Cable representative for 45 minutes at the April 6 meeting, only to find the city is even more a captive audience than the residents.

Cox Cable has a franchise to provide the city with video service, which includes the sole right to televise council meetings. However the city has no control over the rates charged the 9,411 customers in town, who are dependent on cable service for television reception.

“I assumed when we signed a 10-year contract that we had some ability to control costs,” Iseman said.

She was mistaken, according to Cox spokesman Jim Leach, who made a presentation to the council at Iseman’s request for a response to questions left unanswered at a previous presentation by a less informed company representative.

The company has the right to increase rates every year, without a by-you-leave from the city, as it did in 2007, Leach said.

“My bill increased more than 10%,” Iseman said. “Isn’t that considered substantial? And you can come back again in 12 months with another 10% [increase]?”

Yes and yes.

Although the rate for the 39-channel expanded service has not increased since 2008, the rate for the basic 32 channels went from $17 to $20.

The fee for the converter/remote combination was increased 25 cents to $5.50 a month.

Internet service rates are unchanged from 2008, but the flat Cox telephone rate went from $9.99 a month to $12.55.

Bells and whistles add to the costs.

“The original franchise had language on how rates were regulated,” Leach said. “When [the franchise] was renewed in 2006-07, the rate regulation option was no longer applicable.”

And the city has little recourse.

“By 2007, city authority was effectively gone,” Leach said. “The city could have asked for it, but most cities don’t want it because of the costs of audits.

“My understanding is that the city is out of the franchising business.”

The city does retain the right to not be a franchisee under state regulations.

“California is one of the few states that controls franchises,” Leach said.

Companies file applications with the state to serve specific areas. Orange County is split between Time Warner and Cox.

Cox serves the communities south of Jamboree to the Mexican border.

Leach called it a range war.

There are other options for individual residents.

Verizon offers a bundle that includes Direct TV, phone and Internet service.

“Someday the contract with Cox will expire and we can put it out to bid,” South Laguna resident Bill Rihn said.

However, a rate comparison sheet submitted by Leach showed Laguna residents pay the second lowest rate for the 39-channel expanded service, which is also the second lowest number of channels in the expanded category on the sheet.

The list included Time Warner rates in Newport Beach and Tustin, Charter So Cal and Cox service in San Diego, Phoenix, Las Vegas and Santa Barbara, which pays the lowest rate for expanded service, $21.35, which is about $8 less than customers pay for the basic service.

BARBARA DIAMOND can be reached at (949) 380-4321 or coastlinepilot@latimes.com.