Florida City Balks at Buy-Basic Rule9/05/2004 8:00 PM Eastern
Weston, Fla., might have one of the most unique cable-franchising situations in the country. About two-thirds of the city’s 24,000 homeowners hold deeds that require them to buy basic cable.
It’s a distinction that city fathers now would like to shed.
“It’s the No. 1 issue in the city,” according to city manager John Flint. “Obviously, nobody’s going to call us to say the cable company is doing a good job. What they do call to say is 'Why do I have to pay for this?’ ”
DEAL LURED CABLE
The situation is the result of the plans of a local developer, Arvida-JMB Partners, which built most of Weston (population now 65,000). The company included services such as cable TV, as well as electricity and other utilities, within the infrastructure of an initial 17,000-home development.
When Weston was built in the 1980s, no commercial cable company was interested in the area, in Broward County west of Fort Lauderdale and east of the Big Cypress National Preserve.
The developer assured that the system would be self-sustaining by including basic-cable subscription as a requirement of home-purchase agreements.
Homeowners originally made a single payment for utilities and cable to the Town Foundation, a nonprofit agency now controlled by Weston city officials. The foundation, in turn, pays the cable bill to Advanced Cable Communications, which bought the cable plant from Arvida in 1998. Advanced serves 17,000 homes in the community, which are charged bulk-service rates. Comcast Corp. serves the rest.
Flint said the plan was adequate when the homes were built, but didn’t take into account such future technological advances as direct-broadcast satellite. “It’s just not forward-looking,” he said.
Also, the agreement calls for an automatic renewal every 10 years.
One option for change: The town can notify the cable operator, within 90 days of the renewal date, that Weston intends to buy the system, Flint said.
LAWYERS ON CASE
Flint would not discuss the city’s strategy, but commissioners have directed attorneys to seek a means to end mandatory basic subscription.
Advanced bought the system on the premise that it would have a guaranteed subscriber base through at least 2013, vice president and general manager Jim Pagano said.
Based on that business plan, Advanced has invested thousands of dollars upgrading the plant to 870 Megahertz and introducing advanced services such as digital cable, Hispanic tiers and voice-over-Internet Protocol phone service, among other products.
The mandatory subscription applies only to basic cable.
The bulk pricing provides local residents with a 70-channel basic service priced at $32.99, which Pagano said is the lowest price in a three-county area.
Flint counters that basic cable packages vary around the region, so one can’t compare Weston’s pricing with other communities.
Pagano noted that other infrastructure charges once included with home ownership have gradually been unbundled. Cable appears to be the last service bound to each homeowner.
Though Flint said the subscriptions are a big issue in town, Pagano cited a two-year-old customer-satisfaction survey that found 84% of subscribers were satisfied or very satisfied with Advanced and its services.
Also, consumers are exercising freedom of choice by subscribing to DBS services. He estimated that dish penetration in Weston is slightly under the national average at about 22% to 25%.
City officials say no homeowner should have to buy a product they don’t want.
“We will utilize whatever methods possible to give residents choice,” Flint said.
The city also has applied to the Federal Communications Commission for authority to regulate basic rates.