09-27-1993 Council Packet - Laserfiche WebLink

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Excoiatoristxxvmooa Sun«Sailor—MM. Sm». l. 1993- Local commission chooses to regulate Triax ’s rates By John Mugford In 11.184. the Lake Minnetonka Cable Communications Com mission lost its authonty to regulate what a local cable television company could charge area subscribers for “basic ' channels — below chan nel 21. That year, the LMCCC was in the same boat as every cable commission in the country as Congress had taken away that authority. But recently, according to the LMCCC’s attorney, Tom Creighton, members of Con gress have heard enough com plaints to change that. Congress voted earlier this year to allow local cable commissions to choose whether they want to regain rate-regulating authority. And the I4-member LMCCC has taken Congress up on the offer. What that means is that the cable commission will require Tnax Cablevision. the sole sup plier of cable tele\Tsion to residents in 14 lake-ar«»a cities, to prove- th:it Lbe amount it is clurging for ba.sic cable cliaii- ncls is reasonable, said Creighton. The LMCCC will not have the authority' to make a ruling whether Triax is charging a fair rate for other cable packages, such as “satellite” . basic. But the LMCCC can register a com plaint about those rates with the Federal Communications Com mission (FCC), which would then begin an invest!gabon. “Because there is no competi tion for cable companies, the premi.'^e behind this is to have local commi.ssions determine what companies would charge for bii.sic cable if there were competition. " Creighton said. "The FCC IS heipmg by i ro- viding cable companies wibi pages of forms to fill out. Tna,x will determine what a ‘ben chmark’ rate tor cable would be if there were competition."’ It will then be up to members of the LMCCC to determine •Ahether Tnax's basic rates and benchmark rates are reasonable, Creighton said. “Cable rates have just gone urcontroiled too long,” said Tim Saiazar, chair of the LMCCC. “Since the late 1980s. many monthly rates liave doubled or even tripled.” said Jim Daniels. adminisb:“ator ot the LMCCC. “And the commission has voic ed its concerns over the years.” But since the 1984 law iCok ef fect, cable commissioners have been able to do little about in creases in cable rates. “The commission ’s whole funebon changed from one of regulating rates to to that of em phasizing commur.ity p-rogram- mmg," Creighton said. "Regubting rates is a job peo ple associate with local commissions.” At the beginning of this year, Triax did not change the $14.69 monthly rate it was charging subscribers for basic cable channels. However, cable com missioners were upset when the company increased what it charges for ‘.'satellite basic.” one-ber above basic. At that bme. Tnax’s rate for - satellite basic increa.sed to $22.99 per month, up from $22.0.5 ti.e year before. But in June. Triax lowered what it charges for basic cable channels. 'Fhe new rate is $10.25 per month. Creighton warned commis sioners not to be iru‘'jenced by Tnax’s rate reduction. ’’That either means they’ve already determined that the benchmark rate will be lower than what they were charging," Creighton said. "Or it means they were trynng to conrince the commission that it doesn't need to regulate ” Regional managers for Triax were not available for comment. The FCC has frozen basic cable rates until ,\ov. 15. Had the LMCCC not voted to become a regulator by Sept. 1, it would have left tne door open for Triax to increase rates after the Nov. 15 freeze is lifted, Creighton said. ’’Then I don ’t know what power the LMCCC would have had to reduce the rates to the old level.” Creighton said. Should the LMCCC determine that what Tnax i.s charging for basic is too high, it can order Tnax to lower the rate. Tnax would have a chance to appeal the commission ’s ruling to the FCC. The LMCCC will not receive any extra money to regulate basic rates. Instead it must use existing revenues from TraLx’s franchise fee ' ■ to pay the expenses. .....’...... • “I would e.xpect it to cost the commission $2,000 to M.OOO.” Creighton said.