The Two sides of TV Rate Controversy

The often stated view that cable TV is not a necessity makes the argument even more compelling for passage of a graduated rate structure' for subscribers, in the opinión of Jay Barr, a member of the city's Cablecasting Commission. With this reasoning, the commissioner, who has done much of the work on the resolution for a rate change, counters one of the arguments used by opponents. "It it were a necessity, then we would know that all segments of the community would subscribe and receive the benefits of Cable TV, albeit at a greater financial hardship to lower-income families," Barrsaid. "But precisely because it is not a necessity, we realize that if it is financially too burdensome to lower-income families, they will not subscribe and the community aspects of cable TV will be greatly diminished." The proposed ordinance, which has been passed at first reading, is motivated by the desire not to exclude the lower income families in Ann Arbor from the services of cable TV due to a rate schedule which they would find burdensome, Barr said. Final approval could be given at the Commission's October meeting. "It is feit by most commissioners that because of the community nature of many of the programs which cable TV will carry, or has the potential to carry, the exclusión of lower income families from the cable system would be detrimental to the community as a whole, in addition to the loss incurred by the families that would be excluded," Barr stated. f Barr and all the other commissioners except the newest member, Lou Belcher, have 'said that a slraing rate scale could be implemented without any financial loss to the company. "In fact, it may even improve the financial situation of the company by providing additional subscribers at a rate which will more than cover the cost of servicing them."Barrsaid. Disagreement with that point has been expressed by representatives of the company which has the franchise here, Michigan CATV Associates. "We believe the graduated rate will reduce the number of subscribers," said Raymond Clevenger, the attorney for the company. "If the lowered rate is given we will lose more money," the attorney said after he noted that under the present structure the company is losing $500,000 a year during the formative stages. A section in the city ordinance provides for rate changes but Clevenger contends that while the company loses money the commission can't change the rates. "We are in the middle of a contract." The city appears to want to change the terms of the contract, he said. Financing commitments by the company have been made on the basis of the present rate structure, the attorney said. Belcher was also in favor of delaying action, saying it would take'a while to build up public access, which is the whole premise on which the sliding scale is based . But which comes first, the j chicken or the egg? asked Commission Chairman j liam Shepherd, who has spok-l en out for the graduated ratel People not on the system canl not make use of it, Shepherdl said. Belcher said that after ex-I aming company records itl was his opinión that Michigan! CATV Associates could notl lose much more money beforej it would be in default of itsl long-term loans. Belcher accused other 1 missioners of tunnel visión. He said a majority of subscribers, like most Americans, do not like to pay more for a luxury. With a cut-off point of $6,999 in assessed valuation for granting the lower rate of $2, 1,045 single family housing units would be eligible, 1,768 in doublé units, and 594 in I pie units. This would make a total of 3,407 housing units eligible for the lower rate through the assessed valuation procedure. The total number of housing units in Ann Arbor is approximately 31.000, Barr noted. If the proposal included four-unit structures, an additional 916 housing units would qualify. However, because the majority of apartment buildings with more than three units are concentrated in the predominantly student populaed area of the city, and since for the most part the students' present living situation does not reflect a realistic picture of their true economie status, it is not feit that these units should be included, Barr said. Barr also noted that as the number of dwelling units in a structure increases, the assessed valuation does not ris( proportionately. The effect oi this is that virtually all dwelling units in multi-unit struetures would qualify for the lower rate, according to the simple pro-rating plan proposed in the resolution before the commission now. "Since the majority of these multi-unit structures are in the student area, it is not feit that the inclusión of these would further the objectives of the commission. Also, cost reasons may díctate an entirely different type of rate schedule for large, multi-unil structures," Barr noted. How many lower income families will be eligible for the lower rate? Unfortunately, this Would You Qualify? Would you be eligible for the reduced cable TV rates if they are approved? You would be if: - Your dweiling has an assessed valuation of $6,999 or less. -The head of your household is age 65 or older. -You can prove you were recommended for the lower rate by a welfare agency. -You present, as head of a household, a federal income tax form for the most recent year showing at least one dependant in the household and an adjusted gross income of less than $6,000. -You present a Medicaid card showing the address of the location where the cable TV is to be located. tinn is impossible to obtain, Barr said. He said there are two major problems; the Census data which relate value of owner-occupied housing to income only concern one year's income; and more important there is not information available relating rent paid to the value of the housing structure. Since the majority of lower income familes rent, this problem prevents any straightforward computation of how many lower-income families will qualify for the I lower rate, Barr noted. But I the commissioner said the I major concentration would be I in the older northwest side of I the city. It is also feit, according to I Barr, that the Commission I will not have to opérate in the I dark in this area forever. I "Once this resolution nasi been implemented, a simple I survey could be taken tö see if I the lower rates are indeed 1 ing to lower-income 1 lies." 1 This could be done by a I ter asking the household, I unidentified, to state its ineome and the rate it pays, ac:ording to Barr. This I sive plan could indieate whether the resolution was achieving its goal, he said. Barr stressed that the resolution represents an experiment. There is a possibility :hat it will not achieve its obectives. he said. "The resnlution has been carefully considered and is believed to be both equitable and workable. Once it is implemented, further research should teil us if we are achieving our goals. If so, the proposal can be continue." If not, it can be modified or abolished, as the Commission sees fit. "It does represent an opportunity to make cable TV a truly community service, an opportunity which should and must be taken," Barr stated.