Va. County Weighs Action in Guide Spat
By JOE ESTRELLA -- Multichannel News, 3/26/2001
Fairfax County, Va. will review whether it has the regulatory authority to force Cox Communications Inc. to continue producing a monthly programming guide.
The Fairfax County Board of Supervisors last week passed a resolution ordering its staff to study whether the county can take action against Cox for discontinuing Cable Edition, which had been delivered free to 230,000 area cable viewers.
Authored by Supervisor Penny Gross, the resolution is the first step in determining if Cox can eliminate the product "while continuing to charge the same subscriber rates."
Cox touched off the controversy by ceasing to publish the magazine on March 1. Instead, the MSO urged viewers to subscribe to a regional edition of TV Guide at a cost of $3.99.
Cox rejected three alternatives offered by Gross: a reversal of its decision; giving subscribers the choice to receive Cable Edition or TV Guide; or continuing to publish the title until the completion of its system upgrade in Fairfax County.
She argued that dropping Cable Edition would amount to a back-door rate increase of 30 percent.
"We need to take that step forward and look at what authority we may have to appeal to the Federal Communications Commission," said Gross.
Cox contends that there has been no service reduction because the publishing cost- estimated at some $2 million annually-was never built into basic cable rates.
But Ron Mallard, director of the Fairfax County Department of Telecommunications and Consumer Services, said a 1994 study submitted by Media General, the system's previous operator, indicated that the cost of Cable Edition had been factored into basic rates.
"From a regulatory standpoint, we would argue that because the cost was included in rates since 1994, that Cox can't eliminate that service without lowering cable rates," Mallard said.
In a letter to Mallard, Cox Northern Virginia vice president and general manager Gary McCollum said even though the cost of publishing Cable Edition was factored into basic rates in 1994, consumers did not bear that cost because the maximum basic rate charged was only $10.44-well below the maximum rate of $11.46 that Media General was allowed to charge. The difference was also well in excess of the 24 cents built into rates, McCollum wrote.
"In essence, then, the cost of the guide was never included in basic rates," said Cox spokesman Scott Broyles. He noted that subscribers are beginning to adjust, as Cox has already signed up more than 2,000 local subscribers for TV Guide. Broyles declined to discuss the business arrangement between Cox and TV Guide, or address Gross' contention that the MSO is in fact reaping a windfall by saving on the cost of publishing its own magazine, while collecting a percentage of each TV Guide subscription.
