The Town Council Monday denied requests by Prestige Cable Televisionto increase the franchise fee and to return several channels reserved for towns as part of the company's franchise agreement.

"I recommend denial of the rate increase from 3 percent to 5 percent because it'll simply raise the rates further," said Town Manager James L. Schumacher, the town's representative to the countywide Cable Committee.

Schumacher said that Prestige's recent bills to subscribers included the franchise fee as a separate line item.

"We don't want the increase because we'll be blamed for it," Mayor Lloyd R. Helt Jr. said.

Prestige's general manager, Bill Bethune, said he plans to run cable TV and newspaper ads to explain how the franchise fee works.

"We want to clearly explain that the franchise fee is something that's always been there, that it's part of the franchise agreement," Bethune said.

"One reason we're adding the franchise fee to the bill is that the governor is adding a 5 1/2 percent entertainment tax to the cable industry. I feel like they're singling us out for these extra taxes. . . . And our customers are our only source of income."

The governor has proposed making the sales tax applicable to a varietyof services not now taxed, including cable television, but the General Assembly has not acted on the plan.

Prestige also has asked county municipalities to return five of 10 channels set aside for town use under the franchise agreement. Separately, the company is asking to borrow three channels for three weeks to show 24-hour coverage of the summer Olympics.

"We need three channels to show the Olympics, or we'll have to take three channels away from the basic service if the towns won't give up their channels," Bethune said.

If Prestige airs the Olympics package, which is being offered in addition to regular broadcast coverage by the NBC television network, it must purchase transmission equipment costing $5,000, he said.

Prestige must make a decision on the Olympic viewing soon because it takes six to eight weeks to order the equipment, Bethune said.

The Town Council denied both requests.

"I understand NBC is going to show 320 hours of the Olympics anyway," Helt said, in recommending that Prestige's requests be turned down.

Cable Olympic coverage would be close to 1,000 hours, Bethune said.

Councilman Jonathan Herman asked Bethune how the town could accomplish its own programming.

Bethune said itcould be as simple as a video camera and VCR, plus about $1,800 for a modulator for transmission.

"Our own channel would be good for promoting our downtown businesses," Herman said.

Helt said that town programming is a good idea, given sufficient interest.

The Town Council will invite Paul LeValley, director of Carroll Community TV, to its March meeting to learn how to produce its own programs.

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