Cable Rates Steam Simi Valley Mayor
By LINDA HAUGSTED -- Multichannel News, 3/19/2001
The mayor of a Los Angeles suburb is so angry about escalating cable rates that he's privately trying to convince direct-broadcast satellite providers to offer pricing incentives in his town to induce customers to dump cable.
"All I'm trying to do is promote competition. I just want somebody to come in," said Simi Valley Mayor Bill Davis.
He's going after Adelphia Communications Corp., which recently took over the local 30,000-customer system from Comcast Corp. Adelphia representatives stressed the "great and wonderful things" they would do in the community. "But the only great and wonderful thing they did was raise rates," Davis fumed.
Indeed, two days after Adelphia took over in February, the system instituted a $2.16 rate increase. Davis said the city didn't know the system was going to hike subscription costs, but according to Adelphia the rate was planned before the new owner entered the community.
Davis said that what really bothered him was the cable tab in neighboring Moorpark. That community has head-to-head hardwire cable competition between Adelphia and the GTE Media Ventures Inc. cable system. There, Adelphia charges $27.80 per month for 65 channels, including digital selections, Davis said. By contrast, with the rate increase Simi Valley customers pay $39 for 62 analog-only channels.
The city tried to interest a hardwire cable operator, but potential overbuilders said it would cost too much to build the infrastructure.
Davis has met with local retailers for EchoStar Communications Corp.'s Dish Network, as well as corporate representatives.
"I believe we're going to come up with a rate comparable to cable, but for 155 channels," Davis said.
Dish Network spokesman Marc Lumpkin confirmed his company has had discussions with the mayor. There is a possibility of a free hardware or installation offer to Simi Valley residents, but programming would be sold at the same rate offered regionally, he indicated.
The DBS service is marketing a package in the greater Los Angeles region of 155 channels, including five local-in-local broadcast channels, for about $55, according to its ads.
Meanwhile, Adelphia executives have talked with Davis to assure him of improvements to come, including the launch of a digital rebuild later this year.
"We appreciate he has the interests of his constituents at heart. This situation is not long lasting. He needs to get to know us as a positive partner," said Bill Rosendahl, Adelphia's vice president of operations for Southern California.
But Davis is not so sure. He thinks the advent of digital will mean another round of price increases.
"Only competition will bring the price down. Anyone that can come in and bring a good price, I can support it," he said.
Davis said he hoped to announce a deal this week.
