Note: Another case of rising 'basic cable' rates a a result of state franchises. Once local oversight is lifted by the FCC, cable and phone companies have raised the 'basic cable' rate by as much as 200%.
from: Moorpark Acorn [1]
Time Warner wants to get off the hook with Moorpark
By Sylvie Belmond belmond@theacorn.com
Citing the need for a level playing field, Time Warner Inc. filed a petition last month with the Federal Communications Commission to get relief from regulations requiring cumbersome procedures before the cable television provider can raise prices for basic service and equipment rates in Moorpark.
In the petition the company states that it wants the FCC to waive the requirements because sufficient competition has now entered the Moorpark television market. Federal law provides that a cable system can be exempted from rate regulation when another multi-channel video provider is available to 15 percent of the households in the franchise area. That is currently the case, as about 25 percent of local consumers now subscribe to satellite directto-home broadcast services.
The petition is the latest in a series of similar requests approved by the FCC for other communities, said Patricia FregosoCox, vice president of community affairs for Time Warner Inc.
According to a report prepared by city employees, the City Council will review the issue at a meeting on Feb. 6.
If approved, the petition for special relief will not affect the hardfought local franchise agreement but will enable Time Warner Inc. to compete against other companies that provide multichannel television services in Moorpark.
Competition is set to increase further as AT&T has just entered the local television market with its U-verse TV multi-channel video service.
With the arrival of AT&T in Moorpark, Time Warner Inc. can choose to keep the local franchise or opt for a state video franchise, according to the city report.
Either way, city and state laws ensure continued protection of the city's interests by requiring state video franchisees to meet the obligations set by local franchise agreements.
"City officials worked hard to negotiate a franchise to safeguard Moorpark television service consumers," said Councilmember Keith Millhouse.
Moorpark will continue to have oversight over any state franchise holder in regard to customer service issues, FregosoCox said.
AT&T and Time Warner must comply with the customer service standards established by the city of Moorpark, which include a 30second rule for answering telephone calls and a requirement to carry local public education and government channels.
In anticipation of recent developments, the City Council adopted an ordinance last year to make state video franchisees subject to a 5 percent franchise fee and a 1 percent public, education, and government channel charge payable to the city, as is required of Time Warner Inc. in the local franchise agreement.
Time Warner will continue to pay $150,000 for government Channel 10's video equipment in 2009. If the cable provider obtains a state video franchise, the obligation will be shared proportionately with AT&T, said John Brand, senior management analyst for Moorpark.
DISH Network providers are exempt from franchise fees because they use the air and signal bandwidth licensed or sold to them by the FCC to broadcast directly to their customers.
When Time Warner acquired the Moorpark franchise from Adelphia and Comcast in 2006, customer service deteriorated due to technical difficulties.
After months of complaints from residents, the Moorpark City Council threatened to impose a $25,000 fine on Time Warner to recover damages for the cable company's noncompliance with a franchise agreement it had made with the city.
The fine was never imposed because improvements were made by the cable company, Millhouse said. He maintained that the local franchise agreement shouldn't be removed because it provides certain customer protections that won't exist under the state franchise.
"The theory that competition creates good customer service is a farce because quasi-monopolies such as phone and cable companies have few competitors," Millhouse said.
The same problems will persist with other television service providers because they're just as big, he said.
"The customer is a small fish in a big pond. It's time for national consumer bill of rights," Millhouse said.
However, Fregoso-Cox said, Time Warner is entitled to seek relief from FCC regulations because the competition is not bound by the same rules.
Customer service won't suffer if the petition is approved by the FCC, she said.
"At the end of the day it's good news for consumers, because the playing field is leveled by the competition," she said. "It makes Time Warner Inc. competitive, not just in terms of product and pricing but also with customer service."
The new competition will regulate prices, Fregoso-Cox said, because most television and cable companies now offer packages that include phone and video services and the "bundling" is priceeffective for customers.
"Time Warner is vested in Moorpark and committed to doing the right thing," she said. "We had some bumps in the road, and Moorpark has tough regulators but they are fair. We both continue to work to resolve challenges."
The cable company has and will continue to support community events in Moorpark. Time Warner Inc. is sponsoring the city's 25th anniversary. The company also contributes to the High Street Arts Center and it participates in Moorpark Country Days.