TCI LOOKS TO FUTURE WITH FIBER OPTICS

TCI Cablevision's move to a fiber optic system is expected to give consumers more program choices at a consumer cost regulated by the city and Federal Communication Commission.

With fiber optics, TCI could offer more than 80 channels but thinks the system wouldn't be economically feasible.

TCI General Manager Roger Harms said, "Our subscribers will tell us what they're willing to pay for and I don't think they'll want that many."

The move to a fiber optic system will likely cost TCI from $4 million to $5 million, but the FCC would monitor the rate increases TCI would use to defray the system's cost.

Harms said his company reports its rate changes to the FCC and isn't able "to just test what the market will bear by charging what we want."

Since the 1992 Cable Act, the FCC created regulations under which cable companies establish rates for certain services. In a dozen instances, Harms said, TCI has had to lower its rates on installation services.

"We had to lower our basic channel rate $1.06 per customer in July," Harms said, adding that "that's quite a hit" with 14,000 customers in Cape Girardeau County. "I don't know of many businesses that would be able to absorb that and still manage to stay in business."

The expanded basic rate was increased around 60 cents this year. TCI is asking the city, which regulates the basic rate for channels from 3 to 20, for a $1.38 increase. The city rejected an 85-cent increase in February, which TCI protested. The city has 150 days to review the increase request.

The company considers a rate increase every three months, but there hasn't been a rate increase on basic cable channels since 1993, Harms said.

During the 150-day period there was a need to request an additional 52-cent increase because of inflationary costs. Thus, the city is looking at a request for a $1.38 increase on basic channel service. Although TCI serves both Cape Girardeau and Jackson, only Cape Girardeau has the power to regulate the company on basic rates.

"Jackson didn't ask to be regulated, but we're going to keep the rates the same in both cities," Harms said.

The city is expected to make its decision in July. The FCC regulates expanded basic rate increases.

Harms thinks a fiber optic system will make his business more profitable. "When you start offering customers more choices and give them more of what they want," he said, "it will bring in new subscribers and add to the package we're already offering our current subscribers."

Under TCI's new agreement, it has 30 months to switch to fiber optics. "We're still in the planning stage right now," Harms said, "but I think we can start a full-blown project by next year. We have every intention of having the system installed before 30 months have passed."

Harms said the availability of equipment will determine how quickly TCI can move on making the transition.

Once the project is under way TCI will install fiber optic lines in sections that will include no more than 400 to 500 homes. "We'll try to do a lot of it late at night so it won't interfere too much with what our subscribers want to watch," he said.