From a businessman's standpoint, Arlington County's cable television system has never been healthier.

"We're turning the corner," says chief operating officer John Evans, proudly adding that the company expects to reap a profit this year for the first time in its 10-year franchise. "It's a nice feeling to know that there's light at the end of the tunnel."

But from the point of view of the consumer, some critics say, Arlington's 36-channel cable TV system leaves a lot to be desired. "It's lowered what it's offering at the same time it's asking for a rate increase," says U.S. Rep. Robert W. Kastenmeier (D-Wis.), an Arlington subscriber who chairs a key cable oversight committee in Congress. "I wouldn't be concerned about the increase in fees, but at least they ought to maintain their service."

The difference of opinion seems oddly appropriate for the the area's oldest cable TV franchise, Arlington Telecommunications Corp. (ARTEC), which has weathered political debates, deficits, near-bankruptcy and denunciation from the pulpit since it won the county franchise 10 years ago this spring.

With cable systems planned or operating in virtually every local jurisdiction except the District, ARTEC's first decade mirrors the problems and promise of fledgling cable operators across America. As the first Washington area jurisdiction to award a cable franchise, Arlington was also the first to tackle the complex economic and consumer questions the new technology poses.

"Arlington's got a pretty good system," says Edward Dooley, spokesman for the National Cable Television Association. "It's been ahead of its time for a long time, and maybe that's why it's been in so much trouble."

Torn between the conflicting goals of public interest and private profit, ARTEC has struggled to build an $11.5 million system that carries sports, movies, reruns and R-rated fare to 24,000 of the county's 75,000 homes, with mixed reviews.

ARTEC officials promote their Metrocable service as an inexpensive way to view first-run movies at home and they say it holds a special appeal for families wanting to limit entertainment expenses.

"We really like it," says Peggy Williams, whose 11-year-old daughter, Susan, appeared via one of the county government channels carried by ARTEC as an anchorwoman on a recent Nottingham Elementary School newscast. "It keeps the kids home more often instead of being out where we don't know where they are."

Customer complaints have dropped steadily since the company neared completion of its 160-mile system, and the addition of the controversial R-rated Escapade/Playboy channel--advertised by ARTEC as "sensuous and sexy"--has boosted annual revenues by more than $250,000 to about $7 million.

But critics say the company is reducing the services it provides for a $10.95 "basic" monthly fee--a fee that is already one-third higher than the national average. It will rise to $11.55 next month. At the same time, they say, the company is increasing the number of channels available at an added charge.

"It looks like they're trying to get rid of anything that costs money and replacing it with things that are unviewable but cheap," says Jonathan Miller, an ARTEC subscriber who edits two communications trade journals. "They knocked off WOR from New York, which had movies, and replaced it with the Health Channel, which I suspect nobody watches."

And there are other long-simmering concerns about local programming, which is still rare despite repeated ARTEC pledges to beef it up; about programs that don't appear at scheduled times; and about a program guide that doesn't list all available programs.

"Their magazine isn't designed to tell you what's on cable--it's designed to show you what's on pay channels HBO and Cinemax," said Kastenmeier. "You'd have to leave the TV on all the time if you wanted to find out what was really on."

ARTEC does not offer some of the services that are popular in localities such as Reston and Alexandria. While these systems offer viewers two out-of-town "superstations" as part of the basic service, Arlington subscribers receive only one--WTBS from Atlanta.

Reston and Alexandria offer the Nickelodeon/A.R.T.S. channel featuring arts and children's shows, which Arlington does not. The seven Arlington channels dedicated for use by the county government and school system are blank most of the time.

Cable systems planned for Fairfax, Montgomery and Prince George's counties are also promising to carry a much wider range of programming at prices as low as $5.95 a month for 84 channels.

ARTEC officers say they are not downgrading services and are not worried by comparisons with other cable operations. They say they have chosen their programming package to meet the needs of their subscriber base, which has expanded by about 3 percent the past two years. Besides, say the system's backers, Arlington's cable system has been delivering service to its customers since 1978, while the systems planned in Fairfax, Montgomery and Prince George's are still on the drawing board.

"The fact that we have it and it's operating and serves virtually the entire area and that we're practically the only jurisdiction in the metropolitan area, seems to me a big plus," said Arlington board member John Milliken.

Like most other prospective cable operators of the past decade, ARTEC in the early 1970s promised an ambitious system that, in the words of one cable analyst, would "do everything except make breakfast."

Those promises soon soured, however, and by 1981 ARTEC was pleading with the county to help it ward off bankruptcy by extending the franchise 14 years. In return for the extension, ARTEC agreed to help set up production facilities for local programming and to contribute money to the county and to a separate public access group for program production.

That has been translated into about a dozen hours a week of fresh, locally produced programming--shows such as the recent Nottingham Elementary School news broadcast in which fifth-grader Josh Martin revealed that cat food, dog food and bananas are the favorite foods of his two hermit crabs, Snipper and Fred.

The cable system has also left its mark on county government. During a recent cablecast meeting of the County Board, former board chairman Stephen H. Detwiler and two other speakers jokingly plugged their businesses for the TV audience.

Board member Dorothy Grotos, who like Detwiler is a Republican, worries that such TV coverage could allow ARTEC to influence her board colleagues unduly. "Who's going to be against ARTEC if they're running the cameras?" she asked. "Look at the political advantage a candidate has if they're friendly to you."

ARTEC's local programming lags behind that of other cable companies of comparable size and age, according to the National Federation of Local Cable Programmers. County officials are hopeful that the money ARTEC gave to the newly formulated Community Access Corporation and to the county and schools will encourage local offerings.

Still, ARTEC officials say that such strictly local TV is not in high demand among its sophisticated, urban subscribers--an assertion that some local programming advocates do not challenge.

Judith Segel, who supervises cable production for the county's library system, has no illusions that the library's 2 1/2 hours of local programming each week draws hordes of viewers. "If we had two viewers per program , we'd be in good shape," Segel said.

Although disputes remain, ARTEC executives say the worst is behind them: ARTEC can keep the county franchise until 1995; the number of its subscribers is holding steady; and the company's worst money woes are past.

"Right now the business has settled in, and its a normal type of business, as opposed to the horrendous difficulty of doing an urban construction job and implementing a whole new technology," said company President Thomas Richards. "It's much less frantic now."