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Charter Temporarily Halts Calif. Adult-PPV Launch

8/23/1998 8:00 PM Eastern

Although local regulators have no authority over
pay-per-view content, Charter Communications Inc. has decided, at least temporarily, to
bow to community demands in one Southern California city, shelving its plans to launch
adult-PPV selections there.

The City Council of Azusa, a Los Angeles suburb with a
population of 45,000, voted recently to reject plans by the operator to include Spice and
Adam & Eve among the 17 channels that it will add when its rebuild is completed.

The city's name was conjured up by an early developer,
and it represents his dream that the community would offer everything from "A to Z in
the USA" for residents. But the City Council members said that motto should be
amended: It doesn't include "P," for pornography.

Charter officials were warned about the public discussion
of its programming, and they were able to attend the meeting. Critics included students
and administrators from a local Christian college, Azusa Pacific University.

The cable operator offers adult PPV in neighboring
communities, including Pasadena and Glendora, without fuss from consumers. The only recent
flurry over program content regarded a local-origination program in Pasadena.

There, a producer cablecast a program promoting the string
of strip clubs that he owns. When viewers called the operator to complain, the producer
voluntarily pulled the program and said he would recut it to make it more acceptable to
the community, according to Tom Schaeffer, senior vice president of West Coast operations
for Charter.

In fact, even if the operator opts to spike Spice in Azusa
long-term, the network will still be available to direct-broadcast satellite and C-band
customers, which is one reason why Charter said it needs to have an adult service, too.

But this is a bad time to stand on constitutionality:
Charter's Azusa system is in refranchise negotiations and, due to the buyout of
Charter by investor Paul Allen, systems throughout the country will have to negotiate
transfers with local communities.

Although the city portrayed the case as closed in local
press reports, Schaeffer said he has meetings scheduled with council members to educate
them about signal security, parental controls and business issues. Charter has a good
relationship with city officials, so Schaeffer believes that the parties can work through
the issues.

"We haven't launched [adult PPV], but it's
not off the books ... The city knows that it can't regulate. We'll prove that
the security is there and try to work this through, rather than being defiant,"
Schaeffer said.

Charter may have its work cut out for it, though. Azusa was
one of the communities that tried to ban the public sale of Playboy magazine and
other adult titles earlier this decade, settling eventually for heavily wrapped, opaque
copies on newsstands. And some of the councilmen who are currently on the board swept into
office after successfully fighting off a card club for the community.

Officials at Spice Networks had not yet heard of the Azusa
situation, but they expressed surprise. President Steve Saril said it's a rare
occurrence these days -- since the federal government has issued policies that protect
adult speech via cable -- for a community to act against that type of content.

September