1984-05-BOS-min - Laserfiche WebLink

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- 3 - In Adams /Russell. John Ward, Chairman of the Cable Television Advisory Committee, Rate Increase was present for discussion with representatives of Adams Cable Services Division of subscriber rate increases to be announced on June 10 Mr. Pollack, General Manager of Adams Russell Cablevision -- Lexington, NNW Inc. was present. Mr. McLaughlin, Selectman liaison to the CATV Committee, reported that on December 31,' 1982, the Town had been notified of a 3/1/83 Public Hearing held-by the State Cable Commission on deregulation of operating Cable systems. He noted that no specific ref erence to Lexington was made in the notice. He added that since the State has now deregulated Cable Television, the Town no longer has legal authority ' to . control rates, Mr. Ward recapped the. Public Hearing process and also stated that because of the lack of detailed notification,. the Cable Committee was unaware of 'the deregulation procedures until March. 1, 1983. He noted that the two-- -year fixed-rate period specified in the franchise agreement has now expired* He stated that even though Lexington has no control over the rate structure from this point on, the Board and the Cable Committee should, however, determine to their own satisfactions whether rate changes are in fact and proper He stated that after examination of all data presented in Adams/Russell's 10 -year financial projections, the committee is satisf ied . that this. is the case. Mr. Ward explained that the most significant factor in the rate change will be an increase from $7.50 to $13.50 per month for full service for the first outlet (from $b to $12 for senior citizens) , and from $4 to $ 6 for each additional outlet. The basic rate and Lifeline rate for senior citizens are not being changed. He went on to point out rate changes in other options i.e. remote control (which is being reduced, increases ' in charges for outlets under varied subscriptions. • no Mr. ward stated that Adams /Russel -1 justifies these increases on the basis of approximately 120% increase over 1980 projected figures for fixed assets costs for the third year and roughly doubled costs of operation. He went on to explain that cable economics for a new system . are characterized by very large up-front costs,, and net incomes that are negative for the first years. He said that it seems clear , that rate increases are necessary if the Lexington cable system is to remain viable. He noted that Adams/ Russell has not chosen to cut back on local programming and access operations which is the usual procedure when cable systems are having cash flow problems. Mr. Eddison responded that such increases indicate to him that Adams/ Russell had not properly calculated rates in 1980 and questioned the de- regulation procedings when Adams Russell apparently has no competition in Lexington. It was explained that the fact that there are three major net- works available and that the subscription rate in the Town is less than 70% fulfills the criterion for deregulation.. Mr. Marshall. brought-out that after implementation of the increases, Adams /Russell would probably experience a drop in subscribers. Mr. Pollack stated that a survey has shown that Lexington rates are below those-in similar towns. Mr. Eddison expressed appreciation to the Cable Committee for its very helpful report and its assistance 'in understanding the proposal. Mr. Pollack also thanked the Committee for its efforts, and stated that Adams Russell feels it is doing its best in its dealings with the Town. He again �stat ed that the rate increase is tru needed.