FCC checks out Walnut cable TV firm amid nationwide rates gripes.

The Federal Communications Commission, as part of its nationwide response to the consumer backlash over rising cable service rates, is looking into the operations of the cable television operator serving the city of Walnut.

The new rates, which went into effect Sept. 1, came as the FCC implemented the 1992 Cable Act. The new rate structure ignited consumer ire because, instead of resulting in a promised relief from rate escalation, rates rose in many instances.

In its investigation, the FCC is looking at just 16 of the hundreds of companies across the country that have sparked complaints -- and just one operator in the Southland.

In Los Angeles, the city's Department of Telecommunications noted a 400 percent increase in complaints in the two months since the new rates went into effect. In Walnut, officials received 30 phone and written complaints.

The FCC is investigating complaints mostly lodged by local city governments that now are gaining oversight of rates in their communities. Walnut's certification to regulate rates was approved by the FCC on Oct. 1 and Crown submitted its new restructured rates on November 15.

The FCC empowers local municipalities to regulate only basic service rates. If the municipality wants to challenge a cable company on its premium service rates it must lodge a complaint with the FCC. Walnut did so Oct. 19.

The Cable Act set certain pricing benchmarks to limit cable costs for consumers, but it also allowed cable operators to restructure their programs packages. Los Angeles city officials charge cable firms have repackaged their services to enable them to actually increase local revenues and jack up consumer costs.

Los Angeles' Department of Telecommunications filed a letter of protest with the FCC on Nov. 3 complaining about Century Southwest Cable Inc., which serves much of western Los Angeles, and United Cable Television of East San Fernando Valley Ltd., according to Susan Herman, department general manager.

In Century's case, the city told the FCC that operator's rates for basic cable went from $16.30 to $24.67 on Sept. 1, United raised its basic rate from $10 to $10.32, added a special tier rate from $9.40 to $11.75 and reduced the number of available channels from 35 to 33.

On Nov. 17, the FCC announced the complaints it would investigate, and Walnut's is the only protest that the FCC will investigate in the Southland.

Crown Cable, part of Dallas-based Crown Media Inc., has 5,239 Walnut subscribers and is that community's sole service provider. Its executives say it is in full compliance with the FCC's implementation of the Cable Act. Walnut city officials aren't so sure and requested an investigation in a letter to the FCC on Oct. 19.

Walnut has peppered the FCC with complaints over the last three years, as Crown's rates rose 100 percent, according to Shelly Wishner, supervisor of cable operations for Walnut. She said there were a total of 30 phone calls and letters complaining about Crown's rates after Sept. 1.

"We saw these complaints as a possible violations of a rate freeze which was in effect from April 15. For about 20 percent of our residents, the ones with basic service, the rates went up a couple of dollars," Wishner said. "We want the FCC to make sure they (Crown) added up everything correctly when they restructured their rates and see why they went up. We were under the impression they were supposed to go down."

John Jones, director of governmental and public affairs at Crown, said 85 percent of Crown's California customers received an overall rate decrease. However, 15 percent received increases because converter boxes were required to be unbundled from a basic service charge and priced separately.

The 15 percent of Crown's customers who did not subscribe for a remote control or an additional outlet saw a rate increase because of the separate charge for converters, Jones said. Crown serves 105,000 customers in Los Angeles County, and Walnut is its seventh largest market in the county with Pasadena, West Covina and Norwalk as the top three. The company also has 50,000 customers in Riverside County.

Crown has 30 days to respond to the FCC's letter of inquiry. Crown Cable's corporate office in Dallas will reply to the FCC, but Crown's local executives who are based in Alhambra had a meeting last Thursday week with Walnut city officials, said Jones.

Crown submitted its request for restructured rates to the city on Nov. 15 and Walnut now has 100 days to grant approval or ask for an adjustment on these rates. Wishner said the rate request forms submitted by Crown were designed by the FCC and are complex.

"We may have to hire a consultant to help us understand the form. It's like a tax return only a 100 times more complex," Wishner said.