AT&T; to Take Over 6 Cable Franchises

AT&T; won approval from the Los Angeles City Council on Tuesday to take over six of the city’s 14 cable television franchises, including two in the San Fernando Valley, renewing the debate over one media giant controlling so much of the city’s cable system.

The council approved the transfer of franchises from MediaOne. AT&T; agreed to buy the cable company last year but is still months from finalizing the deal, said Paul Janis, who oversees cable franchises for the city.

AT&T; will take over franchises centered in Sylmar, Sunland-Tujunga, Hollywood-Wilshire, Westchester, South-Central and Harbor area, which serve about 235,000 cable customers, Janis said.

The concentration of franchises with any company, particularly one the size of AT&T;, has been criticized by competing Internet service providers--which seek access to the city’s cable lines--and consumer advocates.

“We think there is a danger of facing even higher costs for basic services,” said Ken McEldowney, executive director of the watchdog group Consumer Action. “You have a few monoliths deciding the content and cost of cable television.”

AT&T; believes its takeover of the six franchises will benefit consumers, said Genny Hom-Franzen, a company spokeswoman.

“If a company is one with high customer-service standards and advanced technology, as is the case with AT&T;, it’s a great benefit to consumers to have one company serving the needs of a large area,” Hom-Franzen said.

Janis said there are potential advantages and disadvantages to one firm holding so many city franchises.

“The advantage is that one company with several franchises can achieve economies of scale and offer new services,” he said.

On the other hand, with “many smaller companies, you can compare the quality of each company and have a yardstick to measure them by.”

The city had little choice but to approve the franchise transfers, based on its limited role in an area under mostly federal jurisdiction.

By law, the city must approve the transfers involved in a sale as long as the new company meets financial, technical and legal standards.

Still, City Councilman Mike Hernandez said he is concerned about inequities in the way cable franchises were given by the city.

Boundaries tend to cluster poor residents together, creating franchises that are unappealing to large companies but difficult for small companies to operate profitably, he said.

Because they own stock in the telecommunications industry, Council members John Ferraro, Mike Feuer and Hal Bernson were required to recuse themselves from the vote.