1. Archive

Council to go cable shopping

Angered by recent cable television rate increases, City Council members on Thursday said they want to ask other cable companies whether they'll do business in St. Petersburg. Paragon Cable of Pinellas County, which serves the city, plans to increase its monthly rate for basic cable from $17.95 to $19.95. Paragon's rates have increased by 25 percent since the City Council extended the company's franchise with the city in May 1989.

Council members say they have received numerous calls and comments from people angered by the planned increase, which will take effect Dec. 1.

"I think people have had enough," said council member Leslie Curran, who added that she plans to drop her basic cable service at home. "It is a non-exclusive franchise, and I don't think it will hurt to do a lot of investigating."

Paragon general manager Robert Barlow said he doesn't think a second company would want to enter the market, but added he would have no problem with it.

"I'd welcome the competition," Barlow said. "That's certainly their (the city's) prerogative."

Council member Charles Shorter Jr. said he thinks a little competition might slow the pace of Paragon's increases. Since February 1988, Paragon's four rate increases have raised basic cable rates by 33 percent.

"The only way I see where we can have some balance is to have some competition between cable providers," Shorter said.

But at least one other cable television operator said council members' idea doesn't make economic sense.

Jim Waldo, vice president and general manager of Vision Cable of Pinellas, said Thursday that Vision would not go into St. Petersburg.

Vision, which charges $13.95 a month for 45 channels, is often held up as a rate comparison. To come into St. Petersburg, Vision would have to duplicate Paragon's cable system and incur all the same costs with perhaps only half the customers, Waldo said.

"Our company's position is that we will not overbuild another cable operator," Waldo said. "We just don't feel that it's in the best interest of the customer."

What usually happens when a second cable company enters a market is that one of the companies buys the other, Waldo said. That means the remaining company has incurred a great deal of debt and must raise rates to pay off loans, he said.

Just 17 months ago, City Council members approved a 15-year contract with Paragon despite requests from civic organizations that the city wait 90 days to investigate the matter further.

Council members voted 8-1 to approve the franchise, with council member Edward Cole Jr. dissenting.

Connie Kone, who was president of the city's Council of Neighborhood Associations at the time, said she thinks the City Council acted hastily in approving the franchise agreement.

"I think it goes back to council being reactive to administration," Kone said. "Administration says "Do this' and they do it.

"I don't think they should have rushed into it. I think they should have asked more questions about rate increases," Kone said.

Council member William Griswold said Thursday he thinks the council was "sold a bill of goods" by the cable company. He said he had no idea rates were going to increase as they did.

Griswold also said it appeared at the time that the city had no choice but to give the franchise to Paragon.

"When that vote was taken, the legal department had advised us that we could not go out to bid _ that nobody was going to bid on it," Griswold said. "I certainly hope they (city attorneys) can find some way, if at all possible, to put it out to bid again."

Council members approved the franchise extension even though the agreement they had at the time would not have expired until March 1991. Paragon executives said they asked for the new contract so they could begin improving the cable system.

Paragon then embarked upon a three-year program to upgrade its cable system, rebuilding the system from 37 channels to 54. The franchise agreement between the city and Paragon specified that the company would have upgraded cable to 95 percent of the homes it serves, including St. Petersburg, by July 20, 1992.

Cable company executives agreed to take out a $1-million bond to assure they would keep their promise.

On Thursday, the company asked the city to extend that timetable by five months. Barlow said Paragon wanted more time to redesign its rebuilding plan and teach its workers how to install fiber optic technology instead of traditional coaxial cable.

City Manager Robert Obering recommended against the extension, saying he wanted to hold Paragon executives' "feet to the fire."

Council members, however, didn't appear to understand the matter at first. All council members except Curran voted to extend the timetable. Later in the meeting, they reconsidered the issue, and the other council members joined Curran in opposing the extension.

"I think what they (Paragon) needed to have is a strong message sent to them and that's what I think we did today," Curran said.