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City utilities: electricity, water, - cable?

As latest round of cable deregulation kicks in, more cities enter cable

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Consumers unhappy with cable rates and service haven't had many options: Make do with a rabbit-ear antenna or buy a satellite dish.

In some cities, however, there's another option - one that's growing in popularity around the United States: Switch to a competitor run by the city.

That's what almost 4,300 cable customers in Tacoma, Wash., have done. Last year, the city's utility department introduced what it calls the Click! Network, offering residents not only cable television but digital music, Internet access, and high-speed data connections for small and home businesses.

The National Cable Television Association counts 67 municipally owned cable systems around the country; Tacoma appears to be the largest city to get into the cable business.

That number may grow, analysts say. In the wake of the latest round of cable deregulation, which took effect yesterday - the result of the 1996 Telecommunications Act - many of the nation's largest cable companies announced rate increases hovering around 5 percent.

Municipalities trying to answer consumers' complaints about prices and services may start shopping around. While the options aren't excessive, they range from replacing private cable companies to introducing a second cable company to starting a city cable company.

Municipal cable companies like Tacoma's are going head-to-head with private companies with considerable success - and attention. Diane Lachel of Tacoma Public Utilities reports many inquiries and visits from cities and utilities around the country.

It also attracted the attention of Seattle, just 30 miles north, where city council members were irked by Tele-Communications Inc. (TCI), the resident monopoly in much of the city, and its failure to meet deadlines for upgrading service. Last month, the council decided to fine TCI for failing to meet those deadlines. It also authorized a study of the city's telecommunications infrastructure and will explore options for improving it.

One of these options is a public cable system modeled on Click! (Seattle also experimented with another approach more cities are considering as a way of holding prices in check: introducing more private-sector competition. That opened a portion of Seattle to a second cable company to compete with TCI.)


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