The URL can be used to link to this page

Home My WebLink AboutRPT 4 CABLE INCREASE 02-01-93REPORTS NO. 4 2-1-93 1 Inter -Com .j ATE : FEBRUARY 1, 1993 r 1, TO: WILLIAM A. HUSTON, CITY MANAGER FROM: PUBLIC WORKS DEPARTMENT/ENGINEERING DIVISION SUBJECT: NOTIFICATION OF DIMENSION CABLE RATE INCREASE (P.W. FILE NO. 1995C) RECOMMENDATION Receive and file. BACKGROUND AND DISCUSSION The attached letter from Dimension Cable Services provides the City with thirty (30) days written notification to the City regarding proposed rate structure changes, as well as system modifications. The rate changes will take effect on March 1, 1993. Increases in fees are based upon the increase in operating costs and programming expenses. It should be noted that while annual rate increases are permitted by the Cable Telecommunications Act of 1984, it has been over two years since this system has made any changes to its rate structure. The Cable Telecommunications Act of 1984 removed virtually all regulatory powers that cities had over cable company practices within their respective jurisdictions, including the ability to regulate rates, customer service standards and programming. However, Congress recently enacted the Cable Television Protection and Competition Act (Act) to assist local governments in protecting consumers from unfair rate increases and poor customer service practices by cable companies. The Act intends that the Federal Communication Commission (FCC) and cities will share responsibility for implementation of its various provisions, including rate regulation. In regards to rate regulation,,' the Act specifies that regulations set by the FCC must ensure that rates for basic service are reasonable. These regulations must be written by the FCC to protect subscribers of cable systems that are not subject to effective competition. The FCC will be establishing these regulations by April 5, 1993. r. Mr. William Notification Feburary 1, Page 2 A. Huston of Dimension Cable Rate Increase 1993 CONCLUSION The attached correspondence provides a detailed explanation of all proposed system changes. It should be noted that the City of Tustin is listed as a co-signer on the League of California Cities' comments to the FCC on rate regulation, supporting provisions that will provide the City with the greatest amount of regulatory power possible. Robert S. Ledendecker Director of Public Works/City Engineer Ct f Katie Pitcher Administrative Assistant II RSL:ktb:CABLE ////%/1��\\ DIMENSION CABLE SERVICES January 21, 1993 Ms. Katie Pitcher Administrative Assistant City of Tustin 15222 Del Amo Avenue Tustin, CA 92680 Dear Ms. Pitcher: Dimension Cable Services 1071 Camelback Street Newport Beach. CA 92660 (714)760-1086 Fax (714) 641-1068 Dimension Cable Services is committed to providing an excellent entertainment and information service that meets the broad interests of the Tustin community. As our customers' expectations evolve, we must update our products to continue satisfying our customers' needs. To that end, we are announcing several product and pricing changes effective in March. This letter summarizes the new products, services and price structure. Pmeramming Seivice Levels and Prices Dimension Cable will offer two levels of service in addition to premium and pay-per- view services: Basic -- This 17 -channel service provides over -the -air broadcast channels, popular superstations, public affairs and access programming to budget conscious consumers. The retail price of the basic service will remain at $13.50, an outstanding value at 79 cents per service, per month. As the minimal level of service, all customers must subscribe to this service before adding additional services. Preferred Dimension -- This service offers the television viewer the best of cable television programming. Included in this 18 -channel service are popular cable networks such as CNN, TNT and ESPN. Beginning in March, Bravo and American Movie Classics, currently sold only as commercial -free premium services, will be added to this level of service. A remote control addressable converter with pay-per-view access is also provided with the Preferred Dimension service. The retail price of this service will increase $1.70, from $10.95 to $12.65. With the addition of American Movie Classics and Bravo, which previously were sold separately for $4.95, Preferred Dimension will continue to provide an outstanding value for 70 cents per service, per month. " Times Mirror u Cable Television Ms. Katie Pitcher January 21, 1993 Page two We will no longer sell the existing two -star service, which consisted of the tier programming and a standard converter without the remote control feature. However, we will continue to offer the service as a convenience to customers who currently subscribe to this service. Customers who choose to remain at the former two -star level will continue to receive the same networks they currently do, but will not receive the two new Preferred Dimension services, American Movie Classics and Bravo. The retail price for this level of service will increase to $9.90 a month. The retail price of premium services, such as HBO and Showtime, will remain the same. New Pay -Per -View and Digital Audio Services Pay-per-view movies and sporting events are increasing in popularity among today's active families. To better meet this growing need, Dimension Cable is adding two exciting, high-quality pay-per-view services beginning February l: Viewer's Choice -- First -run movies, sports and special events are available on this network. Movies are priced at $4.95. Viewer's Choice will appear on channel 14 in place of Request and will be available Monday through Friday beginning at 5 p.m. and at 2 p.m. on weekends. Continuous Hits -- This innovative service provides blockbuster movies in a continuous format, providing the big hit movies at convenient two-hour intervals. These movies are priced at $4.95. The service will appear on channel 99 Monday through Friday beginning at 6 p.m. and all day on weekends. Continuous Hits replaces SportsChannel LA, which is no longer in business. Digital Cable Radio -- Dimension Cable is bringing the digital revolution to its customers with Digital Cable Radio, a new, 19 -channel, commercial -free digital audio service. This service offers CD -quality sound and a variety of music services plus stereo simulcasted premium networks for $9.95 per month. A digital receiver and remote control unit are provided with the service. Ancillary Service Pricing Additional outlet charges have been revised to more accurately reflect the cost of providing the service. This fee has not been increased for at least the last five years, despite escalating plant operations and labor costs. Sixty-two percent of our customers do not elect to purchase this service and will not be affected by these changes. Ms. Katie Pitcher January 21, 1993 Page three Additional outlet without converter -- The retail price of additional outlets will increase to $4. Additional outlet with remote control converter -- The price of this service will decrease from $14.80 to $9. Basic service converter -- Customers who require a converter to expand the tuning capability of their television set may obtain a basic service converter for $2 a month. Installation fees -- Standard installation fees for new customers will increase to $50. This increase is necessary to help offset the labor and materials cost of performing the service and does not affect existing customers. Change of service fees -- Customers who request an in-home visit for a change of service will be charged $25. Again, this increase is necessary to help offset the cost of the transaction. Franchise Fee Listing A separate line item displaying the franchise fee calculation will be added to the customers' bill in March. The franchise fee is calculated at 5 percent of all recurring services. The appearance of the fee will be new to customers and will represent charges incremental to Dimension's retail prices. Collections Procedure The billing collections cycle will be shortened to 45 days, beginning with the March billing. Previously, the cycle was 60 days. Customers must pay their bills within 45 days of receipt to avoid late fees and possible disconnection. Detailed billing cycle information is available if you would like further ipformation about this process. Channel Line-up Changes To accommodate the expansion of both the basic and Preferred Dimension services, two channels will change place. C -SPAN will move to channel 33 and Nickelodeon will move to channel 28 on March 1. Customer Notification Procedures Customers will receive a letter explaining the new programming and pricing changes in late January to provide a minimum of 30 days notice. We will forward copies to you as soon as they become available. -- Ms. Katie Pitcher January 21, 1993 Page four Increasing Costs A variety of factors have converged to make these pricing changes necessary. First, the enriched service levels have expenses associated with the programming additions. Second, in addition to enhancing the value of its products, Dimension Cable is making a significant investment in upgrading the cable system, improving technical quality and customer service. Finally, as is the case with most local businesses, costs continue to rise. In the two -and -a -half years since the last price adjustment, expenses have gone up, particularly in the areas of labor and programming. For example, labor costs have increased 22 percent since the last price adjustment, and programming rights fees have gone up 21 percent. Dimension Cable is committed to providing an excellent product for an outstanding value. The service levels have been structured to provide customers with the choice and flexibility to determine the programming mix that best suit their family's needs and budget. We believe the enhancements to the Preferred Dimension service and new pay-per-view and digital audio programming introductions will serve our customers well, providing the enhanced value customers want to see. - As always, I welcome your comments and invite you to share with me any feedback you receive from your constituents. Sincerely Mark Stucky General Manager Enc. DIMENSION CABLE SERVICES PROGRAMMING SERVICE COMPARISON ABOVE RETAIL RATES AND ALL OTHER MONTHLY RECURRING CHARGES ARE SUBJECT TO 5% FRANCHISE FEE *SOLD ONLY TO EXISTING CUSTOMERS. PRODUCT LINE-UPS BASIC SERVICE EXISTING SERVICES KCBS NEW SERVICES .ACkAGE SERVICE RETAIL PRICE PACKAGE SERVICE RETAIL PRICE CHANGE BASIC 12 BROADCAST 13.50 BASIC 17 CHANNELS OF 13.50 0.00 TBS CHANNELS AND USA A & E BROADCAST, KOCE FAMILY WEATHER CH. SUPERSTATIONS KTTV BRAVO (NEW) SUPERSTATIONS, KDOC IKCOP AMC (NEW) VH -1 C -SPAN PUBLIC AFFAIRS NICKELODEON AND ACCESS 2 STAR TIER CHANNELS, NON- 8.20 1VO LONGER :: SAME 9.90 1.'IO REMOTE CONVERTER A'YAILABLE* 3 -STAR TIER CHANNELS 10.95 PREFERRED 16 TIER CHANNELS 12.65 1.70 REMOTE CONTROL DIMENSION PLUS BRAVO AND CONVERTER AMERICAN MOVIE CLASSICS, REMOTE CONTROL CONVERTER 1 -STAR OUTLET WITHOUT 3.40 ADDITIONAL SAME 4.00 0.60 OUTLET CONVERTER OUTLET :ZSTAR OUTLET 1V1T1t A NON 10:30 N.O LONGER SAML: 9.d0 (1::30j t7UTLET .. REMOTE`CONVERTE:R .: AY,4IlABLE* 3 -STAR OUTLET WITH REMOTE 14.80 ADDITIONAL OUTLET INCLUDES REMOTE 9.00 (5.80) OUTLET CONVERTER W/CONFER TER BASIC CONVERTER TUNER 2.00 N ' PREMIUM SERVICE 4.95 AMC INC. IN PREFERRED 0.00 (4.95 ..AVO PREMIUM SERVICE 4.95 BRAVO INC. IN PREFERRED 0.00 (4.95 DISNEY PREMIUM SERVICE 8.95 DISNEY PREMIUM SERVICE 8.95 0.00 HBO PREMIUM SERVICE 12.95 HBO PREMIUM SERVICE 12.95 0.00 CINEMAX PREMIUM SERVICE 12.95 CINEMAX PREMIUM SERVICE 12.95 0.00 SHOHWE PREMIUM SERVICE 12.95 SHOWTIME PREMIUM SERVICE 12.95 0.00 MOVIE CH. PREMIUM SERVICE 12.95 MOVIE CHANNEL PREMIUM SERVICE 12.95 0.00 ABOVE RETAIL RATES AND ALL OTHER MONTHLY RECURRING CHARGES ARE SUBJECT TO 5% FRANCHISE FEE *SOLD ONLY TO EXISTING CUSTOMERS. PRODUCT LINE-UPS BASIC SERVICE PREFERRED DIMENSION* KCBS KNBC CNBC TNT LOCAL PROGRAMMING KABC CNN LIFETIME IRVINE SCHOOLS KTLA ESPN HEADLINE NEWS IRVINE SCHOOLS KCET PRIME TICKET DISCOVERY TBS KCAL USA A & E WGN KOCE FAMILY WEATHER CH. KWHY KTTV BRAVO (NEW) OCN KDOC IKCOP AMC (NEW) VH -1 C -SPAN [MTV NICKELODEON *PLUS, REMOTE CONTROL ADDRESSABLE CONVERTER, AND ACCESS TO PAY-PER-VIEW SERVICES. VNlr