FCC should "crack down." - cable rate gauging

Television Digest with Consumer Electronics, Jan 5, 1998

FCC should "crack down on cable rate gouging immediately," House Telecom Subcommittee member Markey (D-Mass.) said in USA Today Dec. 30. View was countered by editorial in newspaper that preached competition rather than regulation. N.Y. Times editorial Dec. 29 said FCC "needs to listen carefully to cable's critics," but also endorsed competition, saying "the least promising antidote to soaring rates is price controls." Markey said cable rate "El Nino" is "about to hit consumers," and competition might be answer "in a more perfect world." In current environment, however, he said, choices are only: "Do you prefer your monopoly regulated or unregulated?" Markey said cable can't blame escalating program prices because most networks are cable-owned, and independents have no incentives to keep prices down: "If the rules are too lax, tighten them.

But let's not just sit back and hope for a miracle." USA Today said rate freeze would "stifle... cable and phone competition" just as it's getting started. Newspaper suggested that 1993 rate freeze resulted in death of proposed cable-telco mergers that "would have spurred the interindustry competition" and make system upgrades impossible. Newspaper did say that FCC should assure that cable complies with program access rules. N.Y. Times said price controls "squelch innovation and investment" and when controls are inevitably lifted "prices promptly make up for all lost ground." Better answer, it said, is to "pry open the cable market to competition" through tougher program access rules. Paper said FCC should block proposal to sell DBS slots to cable-controlled Primestar, make sure competitors get fair access to regional sports networks, reconsider concentration rules, possibly require cable systems to sell sports channels a la carte.