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 City of Hermosa Beach --- 01-13-98
UPDATE ON CITY RESPONSE TO CABLE RATE INCREASE FROM JULY, 1, 1997
Recommendation
Staff recommends that Council receive and file this report.
Background
At the May 29, 1997 meeting, Council approved a strategy for responding to Century Cable's rate increase for basic cable service that included:
As directed by Council, staff issued an Accounting Order to Century Communications on May 30, 1997. This order protects our consumers by directing Century to keep accurate accounting records of the rate increase for reimbursement purposes should the FCC ultimately order any reductions in their rates.
The second item directed the City Attorney's Office to file a protest with the FCC in response to citizen complaints pursuant to: 47 United States Code Section 543 (c) entitled "Regulation of Unreasonable Rates (Attachment B)."
Unfortunately, subsequent to this recommendation, the City Attorney's Office determined that the City was not able to file a complaint for basic cable rate increases under this provision; rather this method was reserved for non-basic cable service rates.
From the FCC viewpoint, the burden of proving any errors in basic cable rate increases rests with the franchising authority who may or may not choose to pay a consultant to analyze each rate increase. As cable operators generally raise fees in accordance to the FCC's maximum allowable rates, other cities have reported that these reviews usually yield little in the way of financial benefits to the consumer.
Historically, Hermosa Beach has opted to forgo this type of analysis in favor of allowing market forces and FCC guidelines to influence basic rates. In each instance, staff has routinely issued (a) an order for 90-day wait period in order for the City to review the forms, and (b) an accounting order.
Staff had initially hoped that the City would also be able to file a protest with the FCC about the July increase based solely on citizen complaints. Since this is not a viable option, staff recommends retaining the strategy employed with previous rate increases for the most recent one. If Council wishes to revise this approach for this or any future rate increases an alternative recommendation would be to:
Direct staff to hire a consultant to analyze Century Cable rate increases for basic cable service to determine if they are within the FCC's maximum allowable rates.
Fiscal Impact: None
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