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City's cable TV operator sidesteps call to cut rates


The Cable Act of 1992 has reduced cable television prices for consumers nationwide -- but not in Baltimore -- according to a report expected to be released today by the Federal Communications Commission.

Despite two rounds of nationwide cable rate cuts ordered by the FCC, United Artists Cable of Baltimore has posted a $4 increase in the typical consumer's monthly bill since last August. That was the highest among 43 U.S. cable systems surveyed by the FCC. Of those 43, all but six showed decreases or no change, according to the report.

"You win the prize, what can I tell you?" said Meredith Jones, the FCC's chief of cable services.

Ms. Jones said the report, which she characterized as a "quick and dirty" spot check rather than a full-blown investigation, indicated that most cable customers around the country are receiving sizable decreases. "Baltimore is very anomalous," she said.

Marilyn Harris-Davis, a spokeswoman for United Artists, said the rate increases were reasonable.

"The city has reviewed our rates. The rates have been deemed acceptable by them," she said, adding that she could not comment on rate changes in other markets.

The FCC report is based on rates that Baltimore's cable franchise is putting into effect today. While it does not provide new information about those rates, which were announced in June, it is the first study that compares the city's new cable rates to others around the country. The report deals only with Baltimore and not its surrounding counties.

Congress passed the 1992 cable law after being flooded with consumer complaints about steep rate increases by cable television companies. Most of them, including Baltimore's, enjoy monopoly status.

Last year, the FCC ordered a 10 percent average rate cut. It followed that with a further 7 percent rollback in January, after many complaints that cable companies had increased their rates during the first round of adjustments.

The report compared rates adopted this month with those in August 1993, before the first round of cuts took place, and in May 1994, before the second round of reductions.

By both measures, the typical Baltimore consumer's bill has shown an increase. According to the FCC, the typical bill in Baltimore went from $19.04 in August 1993 to $22.52 in May 1994 to $23.04 now, not counting tax.

The FCC defines a typical subscriber as one with basic cable service (broadcast channels and a few basic cable channels), expanded basic service (an enhanced package with more non-premium cable channels such as ESPN and WTBS), one remote control unit and one converter box.

The typical-subscriber standard is not a perfect measure. Because it excludes multiple-outlet and installation charges, which did show substantial decreases in Baltimore, it understates the savings for new customers, people who have moved or customers with multiple outlets. It does provide a more accurate gauge of charges for longtime United Artists customers with a single outlet.

The report shows that United Artists managed to keep its typical billings up while other cable systems were cutting theirs. It did so by a number of means.

In response to the FCC's January order of an average 7 percent rate cut, United Artists reduced its programming charges for basic and expanded basic cable by just 4.61 percent, Ms. Jones said. The cable system told the FCC it would be able to justify that figure because it would show that it is a "low-price" system -- that is, one whose prices would dip below FCC benchmark levels if the full 7 percent cut were applied.

But the typical Baltimore consumer will not see even that 4.61 percent decrease when July's bills come in. That's because a 99-cent programming cut was offset by a $1.51 increase for equipment rental, Ms. Jones said. Most of the increase came in the cost of the converter box, which jumped from 97 cents to $2.38 between May and today.

"They're saying that in Baltimore they lowered it too much in the first round," Ms. Jones said.

Ms. Harris-Davis, the United Artists spokeswoman, said the converter charge falls within the range the FCC allows. She said part of the increase reflects the high rate of converter box theft or damage in Baltimore, while part of it balances out some of the cuts on the programming side.

"Quite frankly, we are a business," Ms. Harris-Davis said. "We did the best we could to protect the consumer."

Like the equipment rates, the cost of United Artists' programming has been bobbing up and down since last August. Comparisons are more difficult, however, because the Baltimore system added three channels to its expanded basic service between August and May.

Last August, it cost a city subscriber $17.35 a month for 45 channels of basic service, or 39 cents a channel. Expanded service of five channels cost an additional 65 cents, or 13 cents a channel, for a total of $18 for 50 channels.

By May, basic service had dropped to $10, but the number of channels was reduced to 21, making the price per channel 48 cents. Thirty-two additional channels were packaged as expanded basic service at a charge of $11.48, or 36 cents a channel, for a total of $21.48 for 53 channels. That represented an increase of $3.48.

The second round of changes erased that increase, but cable companies more than made up for it on the equipment side.

While monthly rates have not come down, subscribers have received relief on a number of services that formerly carried hefty charges. Installation, $40 last August, is now $28.94 without cable or $14.47 if the house is prewired. Remotes, which were $2, are 17 cents and extra outlets, once $5 a month, are now free.

The rates United Artists has proposed are not necessarily set in stone. The company still must file a document by Aug. 14, explaining its rate decisions and justifying its claim to be a low-price system.

"No company can merely take the position that they're a low-price system and not have regulators take a look at it," Ms. Jones of the FCC said.

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