Newspaper article THE JOURNAL RECORD

Cable Industry Deregulation Won't Affect City Operations / When Effective Jan. 1, 1987

Newspaper article THE JOURNAL RECORD

Cable Industry Deregulation Won't Affect City Operations / When Effective Jan. 1, 1987

Article excerpt

Deregulation of the cable industry, to be effective Jan. 1, 1987, is not expected to have a major impact on systems in Oklahoma City and surrounding communities.

Congress deregulated cable TV pricing with the 1984 Cable Act.

Nationwide, cable television system operators have been warned they risk a customer backlash if they gouge subscribers when most municipalities lose their right to control rates.

But in Oklahoma City, Cox Cable has not been required to obtain city council approval before adjusting their rates. Cox's contract with the city provided that approval would not be required until the system had passed a 50 percent penetration of households.

Jill Trione of Cox said they have only reached 38 percent saturation.

"We could raise our rates without approval of the council. That won't be the case after Jan. 1 for others," Trione said.

"In some cities, they had to fight for every dime," she said. "But we will be status quo. It will be exactly the same for us."

Cox's franchise fees will not be affected by the five percent cap provision in the law because their fees are currently only three percent.

All 270 cable systems in Oklahoma have a contract with the city where they operate. Provisions differ greatly from one contract to another.

Danny Rees, a system manager for Multimedia Cablevision Inc., said the marketplace will control prices and subscribers will not let the systems begin charging exorbitant prices.

"I don't think people would allow that, especially with economic conditions at this time. I don't feel it will come about," Rees said.

Only basic service is regulated by the city council. Multimedia charges between $10 to $11, depending on the system, for 29 channels. The national average is just over $10. Cox's fee is $12.95 for 30 channels.

Rees is manager of the Bethany/Warr Acres system and the Nichols Hills/The Village cable systems owned by Multimedia. The company also serves 16 other small communities in central and northeastern Oklahoma. Each system has been regulated to some extent, Rees said.

Cable operators are businessmen, have a right to compete and let the market set their prices, said Jay Allbaugh, executive director of the Oklahoma Cable Television Association, who does not foresee any price gouging as a result of deregulation.

Allbaugh said some "good" cable systems already took an automatic price decrease when the law was enacted in 1984.

"I don't see it (deregulation) having much affect at all," Allbaugh said. "The only places where I think you'll see a significant change is in spot areas where the prices have been kept so low for so long they need to catch up with their costs."

"There are several that have never had regulation and several where the city council has let the business set the rate."

Allbaugh said Oklahoma City is fortunate in that "they've had an excellent company come in and build their system. …

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