News

FCC Upholds Ventura Rate Rollbacks

1/10/1999 7:00 PM Eastern

The Federal Communications Commission has upheld a 20percent rate rollback ordered by the City Council in Ventura, Calif.

Century Communications Corp. appealed the city'sdecision, arguing that effective competition exists in the community.

The City Council targeted Century in July, after residentsobjected to a 6 percent rate increase in March. The council scrutinized theoperator's paperwork, deemed the increase unjustified and ordered Century to rollback its basic rate from $31.50 per month to $25.07.

But the operator further angered customers and regulatorswhen it notified customers in July that it would institute huge hikes in its tier rates. A12-channel tier taken by 65 percent of the operator's 16,000-customer base went from$4.09 per month to $15.29. Two other six-channel tiers also jumped sharply, by more than450 percent. Those tier increases effectively wiped out all but about $3 of the raterollback.

Council members accused the operator of raising rates forits tiers specifically to offset the rollbacks, but Century executives said the timing wascoincidental. When the council indicated that it would not negotiate, nor back down on itsorder, Century went to the FCC.

The operator cited competition from direct-broadcastsatellite and another hardwire cable operator, Avenue TV Cable, arguing that it faceseffective competition. Under federal law, a community is competitive if at least twoindependent distributors operate there and the second-largest of the competitors serves atleast 15 percent of the market.

Ventura argued that Century's claims were ridiculousbecause Avenue TV does not overlap Century's operation. Both companies are franchisedto served Ventura, but each has carved out its own niche, and neither has published plansto overbuild the other.

Ventura Mayor Jim Friedman, an aggressive critic of theoperator, publicly called the FCC action "a great Christmas present" for cablecustomers.

Ventura and Century continue negotiations forrefranchising, but the mayor has vowed to seek other competitors for the community. Thecity may get a new operator another way, since Century's owners said late last monththat they had hired an investment banker to "explore strategic alternatives,"including the possible sale of the company.

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