HomeMy WebLinkAboutRPT 7 CABLE RATE INC 11-05-90DATE: OCTOBER 30, 1990
TO: WILLIAM A. HUSTON, CITY MANAGER
FROM: PUBLIC WORKS DEPARTMENT/ENGINEERING DIVISION
SUBJECT: CONTINENTAL CABLEVISION RATE INCREASE
RECOMMENDATION:
Receive and file.
REPORTS NO. 7
11-5-90
Inter - Com
BACKGROUND:
The attached letter from Continental Cablevision provides a sixty (60) day
written notification to the City regarding proposed changes in Continentals
monthly rate structure.
The rate increase is predicted on the increase in customer service operating
costs and programming. Rate increases are permitted by the Cable Act of
1984; and, the Act also precludes a local agency rate regulation.
Also, attached to this memo is a letter being sent to the Continental
Cablevision customers outlining the proposed rate changes. This letter also
outlines Continentals plans to improve the reception quality of KCBS, KNBC
and KTLA by January 1991.
1/7
Bob Ledendecker
Director Public Works/City Engineer
BL:ccg
Attachments
23 October 1990
Mr. Bob Ledendecker
Director of Public Works/City Engineer
Department of Public Works/Engineering
City of Tustin
300 Centennial Way
Tustin, CA 92680
Re: City Ordinance No. 1002, Section 6, Rates
CATV Franchise
Dear Mr. Ledendecker,
Continental
Cablevision
SOUTHERN
CALIFORNIA
REGION
�E
417
TUSTlt,! PDLL: -
In compliance with the above referenced section, Continental
Cablevision hereby provides 60 days written notification to the City
of Tustin for changes in its monthly rate structure.
Enclosed is a copy of the notification, which will be sent to our
customers during the months of November and December, concerning the
monthly rate change on the monthly service. In January, only the
paragraph stating the service price adjustment will be placed in the
bills. December and January will have a line on the bill indicating
that an important message is included in the bill. This notification
does comply with the timing requirements set forth in the City of
Tustin Ordinance No. 1002.
The monthly rates to take effect on 1 January 1991 are as follows:
SERVICE LEVEL
EFFECTIVE RATE
PREVIOUS RATE 1 JANUARY 1991
Basic Broadcast
$
2.00
$
2.00
Standard + Basic Service
$
14.95
$
16.95
(without converter, grandfathered
customers only)
Standard + Basic Service
$
17.95
$
19.95
(with converter)
Senior Standard + Basic Service
$
12.95
$
13.95
Or. Co. Property Tax
$
2.00
$
2.00
(all accounts)
1st Premium Service
$
9.00
$
9.00
Add'1 Premium Service
$
5.00
$
5.00
SportsChannel
$
9.00
$
10.00
(stand alone service)
Additional Outlet
$
3.50
$
3.50
(without converter)
Additional Outlet
$
6.50
$
6.50
(without converter)
13816 Red Hill Avenue • Tustin, California 92680 • Telephone (714) 731-0992
As you will notice from the attached notification, this rate increase
is directly attributed to the 21% increase in programming and
customer service operating costs. The SportsChannel rate has
increased 1570 over the 1990 level, necessitating this service to
become a stand alone (a la carte) premium service. Other than the
property tax surcharge, it has been nearly two years since our last
price increase. If this theory had not been imposed on our business,
then no adjustment would have taken place in 1990. Besides the
Standard + Basic Service Package and SportsChannel, all other prices
remain the same.
As you might recall, the Basic Broadcast package contains the 18
over -the -air broadcast channels, TBS, WGN and the Community
Programming channel. The Standard + Basic Broadcast package contains
all of the channels listed in the Basic Broadcast package plus all of
the satellite delivered channels (i.e. TNT, ESPN, CNN, USA,
Discovery, American Movie Classics, and many more).
As always, if you may have any questions or concerns, do not hesitate
to contact me at (714) 731-6793.
Sincerely,
Joseph J. Casasanta
General Manager
Enclosures: As Noted.
cc: P. Foye
J. Gibbs
f:\micro\city\91rates
I
I i. C-, v C, 17, b ( , r 1990
Dear Continental. Cablevision Customer,
L
So much has happened since I last reported to you inIuly. At that
time, I clave you an update on the Orange County Property Tax
situation ac w -I as the, Channol 2 and Channel 4 antenna situation.
'Sincc then, we have been concentrating ng our efforts towards
re`olving both of these issues. Allow me to take a few minutes of
your time and provide you with some updated information.
Orange County Property Tax
During the month of August, the Assessment Appeals Board heard and
decided on tho f first of ten ccmpanies appeals . Tris, case Was very
successful for cable consumers in Orange County. The Assessor's
novel theories were totally rejected. The hearing involved the
valuation of a business' tangible property and its possessory
interest. Tangible property can be summarized as the investment in
capital equipment expenditures in order to operate a business. For
my company, this capital equipment involves such.items as the
converters that are in your home, the distribution cable and
electronics that are mounted on the telephone poles or placed in
underground enclosures and even our satellite receiving equipment.
Anyway, in that case, the decision, was ruled in favor of the "cost"
approach to depreciation of tangible property. A second case will
be presented before the Assessment Appeals Board in the spring. On
21 September 1990, the Orange County Board of Supervisors decided
to create an impound account (escrow) and reserve all of the
challenged cable television property tax monies in this account
until a final decision is rendered by the Assessment Appeals Board.
A remaining issue is the length of time that the final decision
will be made by the Assessment Appeals Board and only based upon
that decision can we determine the new property tax value of our
business. I will keep you informed of this situation.
Picture Quality
During the past six months, we have concluded all of the necessary
structural and engineering drawings required by both the City of
Tustin and the City of Santa Ana for our new antenna site. This
new antenna site will be used to improve the reception of KCBS,
KNBC and KTLA. As of 1 January 1991, you will be receiving the
best possible reception on these channels in the Orange County
viewing area. The yearly maintenance costs in operating this site
will be over $15,000 per year. This is a major commitment and
investment in providing our customers with the best possible
P J ctLlr _ �uqgj_i t (Cont i hued)
picture quality. The time period ha- been long, but it is finally
over. During the 1990 year, we have invested funds in excess of
$500,000 for the refurbishing and upgrading of the cable television
plant in Tustin, so that we can provide the picture quality you
expect. We also have continued with our on-going preventative
maintenance program which is de signed to preer,--,pt problem-, bef orc
they disrupt your service. t, e wi 11 only pc rf orm repairs on the
main distribution plant during the hours o--` 12am until_ lam in order
to minimize the effect, on our viewing audience. AS a reminder, if
for any reason, you are experiencing reception difficulty, contact
the office immediately for prompt resolution.
Programming Variety
Continental Cablevision is very proud of the programming that we
have made available for you. Programming services (i.e. TNT, CNN,
Prime Ticket, AMC, The Disney Channel., Discovery, and many more)
which we carry are truly designed for everyone's enjoyment. Even
Witt) the most complete Basic Broadcast + Standard Package in Orange
County, our customers indicate a desire for even more programming.
We have offered the Goodwill Game. during July and August
exclusively on TBS. Starting on 1 December., 1990, we will provide
American Movie Classics on a 24 hour basis. This service provides
an incredible selection of classic movies not available anywhere
else. We also launched HSN full time on channel 49. Based on the
feedback from our customer surveys, we are planning a launch of
Pay -Per -View programming during the first quarter of 1991. 'These
channels will be offering 24 hours a day selection of box office
hits that you may purchase at your viewing leisure.
Service Price Adjustment
Other than the property tax surcharge, it has been nearly two years
since our last price increase. If this theory had not been imposed
on our business, then no adjustment would have taken place in 1990.
In meeting your needs and expectations, our customer service
operating costs have risen 21% over the previous two years. The
programming costs alone have risen 250. With these costs rising,
it will be necessary for us to make an adjustment to the price of
L
Scrv_i_c-c- _Price AdIustment (continued)
our Monthly Standard Package. The SportsChannel rate has increased
1576 over the 1990 level, necessitating this service to become a
stand alone (a la carte) premium service. Therefore, effective 1.
January 1991, the monthly price for our 40 channel Basic Broadcast
+ Standard Package and other services are as follow:-:
Service Level
Current Rate
Net,,, Fate
Basic Broadcast
$
2.00
$
2.00
Standard + Basic Service
$
14.95
$
1.6.95,
(without converter)
Standard. + Basic Service
$
17.95
$
19.95
(with converter)
Senior Standard + Basic Service
$
12.95
$
13.95
Or. Co. Property Tax
$
2.00
$
2.00
(all accounts)
1st Premium Service
$
9.00
$
9.00
Add'1. Premium Service
$
5.00
$
5.00
SportsChannel
$
9.00
$
10.00
(stand alone service)
Additional. Outlet
$
3.50
$
3.50
(without converter)
Additional Outlet
$
6.50
$
6.50
(without converter)
Besides the Standard + Basic Service package and SportsChannel, all
other prices remain the same. While we understand that no rate
adjustment is ever welcome, please be assured that we are committed
to meeting your expectations. This rate adjustment will enable us-
to
s-
fio maintain our quality and variety of programming services; and
hire, train and keep additional professional customer service and
technical employees so that we will continue to be responsive to
your needs.
Many Thanks for your continued patronage of Continental
Cablevision. We look forward to serving the future television
needs of yourself and of this service community.
Respectfully,
Joseph J. Casasanta
General Manager