FCC Stalls Texas Citys Basic-Rate-Cut Effort

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Federal regulators have dealt the city of Arlington, Texas,still another setback in its struggle to secure rate relief for some 60,000 local AT&TBroadband & Internet Services (formerly Tele-Communications Inc.) basicsubscribers.For the third consecutive year, the Federal Communications Commission said itwill review TCI's appeal of a rate order issued by Arlington city lawmakers. Thistime, it will examine a 1998 order that sought to cut basic costs by 19 cents per month.

Moreover, it also granted AT&T Broadband an emergencystay of the city's order, which would have slashed the MSO's rates beginningnext month. The operator will be allowed to charge its existing basic rate of $10.28 permonth until the FCC decides the issue.

City officials are not holding their breath, however, sincethe FCC now has three years of appeals involving Arlington rates pending before it. Afourth year is also possible if the city challenges a recently announced increase thatwould hike basic service by another 47 cents per month June 1.

Frustrated local regulators said the FCC's decisionwas not "unexpected," given the agency's historic foot-dragging, but theycomplained about the resources spent preparing rate orders that TCI scuttles with a simpleappeal.

"It's like we might as well not have bothered todo anything in the first place," said Jennifer Howry, assistant to Arlington'scity manager. "Basically, they're laughing in the face of the subscribers andthe city. We've got the authority to regulate [basic] rates, equipment andinstallation costs. But then, TCI simply turns around and appeals every rate order that weissue."

Arlington recently tried to circumvent the process byamending its local cable ordinance to make it a misdemeanor for TCI not to abide by thecity's 1998 order, which set basic rates at $10.09 per month and required lowerhourly service and equipment costs. The FCC's grant of TCI's stay requestsprevents the city from enforcing the ordinance.

Valencia McClure, AT&T Broadband's director ofcommunications, defended the 1998 rate hike as necessary to cover channel additions to theMSO's Arlington program lineup, including WGN, MSNBC, Turner Classic Movies,Speedvision, TV Land and Texas Cable Network.

This year's price increase is the result of adding newchannels, rebuilding the local network and installing a new customer-billing system, sheadded.

McClure said that by staying the rate order, the FCC willspare local subscribers an initial price cut, followed by an increase if federalregulators rule in TCI's favor.

Meanwhile, 1999's rates, set to go into effect June 1,will swell local cable costs by $1.50 per month, including a 47-cent jump in the cost ofbasic cable in rebuilt areas. Basic service in areas awaiting rebuilds would remain at$10.28.

"It's a difficult position," McClure said."TCI and the city share the same frustration [with the FCC]."

Despite the FCC's inaction, Howry said, city officialsare determined to remain proactive. The city has already begun its analysis of AT&TBroadband's next proposed increase, and it plans to have its rate order issued beforethe June 1 effective date.

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