United Cable Fined for 2 1/2-Year Delay

Irked by repeated delays, the Los Angeles City Council on Friday voted to assess United Cable Television more than $51,000 in lost revenue for failing to complete the East San Fernando Valley cable TV system on schedule.

At the same time, the council tentatively approved a United Cable request to extend, for the fourth time, the completion deadline. The new target date is Feb. 28, 1989.

To discourage further delays, the council also voted unanimously to require the company to deposit $186,200 in an escrow account. The money will be forfeited if United fails to meet the February deadline.

Warning to Others

The threatened penalty was recommended by Councilwoman Joan Milke Flores “as a means of informing all cable companies that failure to comply with franchise terms in a reasonable, timely fashion will result in adverse consequences.”

Flores, chairwoman of the Industry and Economic Development Committee, expressed frustration with United’s “history of failure.”

“United always came up with what they considered viable excuses,” Flores said.

The $51,269 assessed the company in “lost franchise fees” was recommended by the Board of Telecommunications last October, but the penalty had not been approved by the council or the mayor.

The extension is the fourth since the company won the cable franchise in 1983 on the promise that it would complete the system by December, 1985.

United is about 100 miles short of completing the 935-mile system and is serving approximately 35,000 out of a potential 185,000 homes in the East Valley, company President William Cullen said this week. The areas still lacking cable service are parts of North Hollywood, Sherman Oaks, Studio City and Toluca Lake.

The last approved deadline for completion of the system was June 30.

Cullen said the extension was needed because of problems encountered with the city Department of Water and Power over the stringing of cable on utility poles. United was forced to restring the cable on hundreds of utility poles because department inspectors believed the cable was strung unsafely.

Susan Herman, general manager of the city Department of Telecommunications, said the extension will give residents a reasonable expectation of when they can get cable service.

Other Fines Possible

United is liable for $440,900 in fines for failing to meet earlier deadlines, but the council on Friday was only considering whether to impose $186,200 of that amount. A decision on whether the company should have to pay more has been postponed until the system is completed.

To avoid losing the money in escrow, United must complete installation of the system by Dec. 31 and provide full service by Feb. 28, 1989 under terms of the council’s 10-0 action.

Half of any fine would go toward “cable television-related expenditures directly benefiting the East San Fernando Valley,” according to the council action. The council would determine how the other half was spent.

United officials have argued against any fine, contending that the delays have been beyond the company’s control. Cullen has said the company has a strong financial incentive to finish the $65-million system as soon as possible. He pointed out that the company loses income from delays.

City officials have acknowledged that they have little choice but to grant extensions to the cable firm. It would take even longer for the cable system to be completed if the city had to find another company to finish the job, they say.

The proposed extension must come back to the council for a final vote. It will then go to the mayor for his approval.