Discounts illegal for cable service
November 15, 1989
Differential rates for basic cable television service in DeKalb were unanimously prohibited Monday by the DeKalb City Council, though one major cable franchise said the move contradicts the 1984 Cable Communication Act.
The action stems from Warner Cable Communication offering discount introduction-rate service to 35 residents of the student dominated West-Ridge Apartments, 919 Ridge St.
“I don’t see there is any specifications in the act that says we can’t do this,” said DeKalb City Manager Mark Stevens.
Craig Perica, system manager for Warner Cable, said the half-price offering for three months of viewing was a marketing promotion the company previously used for other new city subscribers in DeKalb.
A proposed $500 fine for violation of the ordinance and “some means of enforcement” were suggested by a city official. The ordinance prohibits discriminatory pricing practices among cable television operators.
Gerald DeGrazia, senior director of government relations for Warner Cable, asked the city council to define discriminatory pricing practices.
“We think that your definition (of discriminatory pricing practices) might be wrong,” DeGrazia said.
City officials said “price discrimination is any type of discrimination in subscription rates in any cable service.”
DeGrazia said under the act, “an operator can offer different rates among different classes of customers.”
The act, however, also states that local governments can “prohibit discrimination among customers of basic cable service.”
Wayne Studniarz, owner of Cable Sat Inc., a private cable company servicing about 30 West Ridge apartments, said it has been an “uphill battle to have private competition” with Warner’s pricing practices.
“All I’m looking for is a fair, level playing field,” Studniarz said.
“Warner has unfairly competed,” said 5th Ward Alderwoman Bessie Chronopoulos.