05-28-1991 Council Packet - Laserfiche WebLink

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46 MunichaRMl Ntws May 6,1991 FORUM Metzenbaum Claims Need for Cable Legislation By HOWARD M. METZENBAUM ^ M A h'S yc**’* refonn of the cable tele- I vision industry is once again high I op the agenda for consumer JL protection legislation. The reason is simple: Consumers want it and need it. Every member of Congress hears from constituents who are fed up with escalating cable rates and poor service. Consumers are captives of cable systems that are free of competition and regulation. While some operators have shown restraint, loo many have abused their monopoly power to overcharge consumers and ignore their complaints and coiKems. Since deregulation took effect in 1987. ca ble rates have risen nearly four times faster than the rate of inflation. According to the General Accounting Office, approximately 1.5 million cable consumers have been sut^ jected to rate hikes of more than 100 percent sitKe deregulation. At a Senate antitrust hearing I chaired, the Consumer Federation of America testified that consumers are be ing overcharged by as much as S6 billion annually. Complaints about cable go beyond rales. Sports fans have expressed concern about the movement of sports progranuning from over-the-air television to cable. There have been inmunerable complaints regarding cus tomer service from consumen who have had to deal with cable companies that take for ever to install cable service or fail to answer the phone when a subscriber has a question or needs a lepair. Consumen may be paying more than they * ' ■» have to for cable because vertical integration has stifled potential competition from alternative distribution tech nologies. such as wireless ca ble and the satellite dish in dustry. Ten of the 15 most popular basic cable networks are owned or controlled by multisystem cable operaton. Cable companies also con trol four of the five top pay movie services. Representa tives of alternative tech ’ lo gics testified before the Sen ate antitrust subcommittee that they are having trouble breaking into the market be cause some distributors have been shut out from popular program channels which are owned by the large multisystem cable oper ators. Seme argue that cable legislation is unnec essary this year because the FCC is prepared to alter its definition of effective competition, so that more cable systems will be regulated across the nation. While it is good news that the FCC has finally decided to dispense with its absurd definition of effective competition, Congress must still act. Even if the FCC action results in the reg ulation of every single cable system across the country, consumers may not receive much relief. The cable act authorizes regu lation of only basic cable service, which is defined as any program service tier that in cludes over-the-air broadcast signals. i h MiniNIAUM Many cable companies across the country are mov- ing popular program chan nels, such as ESPN and Turner Network Television, off the basic tier in order to insulate them from any fu ture regulatory scheme that might be imposed by the FCC. Even if the FCC wanted to stop this retier ing. there is little the com mission can do under cur rent law. In short, unless Congress acts, the cable in dustry w ill be able to skirt regulation of the program charmels that impel people to buy cable in the first place. I am pleased to see that the leaders of the Commerce Committee have not fallen under the influence of those who argue against leg islation to protect cable subscribers. Sens. John Danforth (R-Mo.), Daniel Inouye (D- Hawaii) and Ernest Hollings (D-S.C.) have reintroduced a cable bill. S. 12, and 1 am once again an original co-sponsor. Sens. Danforth, Inouye and Hollings should be commended for moving quickly to reintro duce a cable bill that addresses the key prob lems plaguing the cable industry. However, S. 12 is not as strong as I should like it to be. and that is why I introd.N‘*xl my own bill to permit local regulation uf rates in communities where consumers are served by one cable programming distributor. 1 also introduced a bill to promote compe tition in the delivery of cable programming. Congress must act on the issue of program access for alternative technologies because the FCC will not. FCC Chairman Alfred Sikes has argued in favor of adopting rules that would nuke it easier for alternative tech nologies to gain access to cable program ming for resale to their subscribers, but cur rently, the FCC has no mandate tc adopt such rules. Cable representatives balk at the idea of having to sell their program cha>inek to their potential competitors, even though cable has been receiving special treatment from Congress for years. Fifteen years ago Congress helped invig orate the cable industry by passing a law that guaranteed cable operators free carriage of broadcast network programming. But now the cable lobbyists here in Washington want to deny other infant technologies die oppor tunity to pay a fair price to get the program ming which they need to compete. The bottom line is this: It is simply bad public policy to continue to allow cable op erators to charge rates that are not con strained by either competition or regulation. Legislation is needed to protect consumers and promote competition in the market for multichannel video prognmming. While that might seem unfair to those cable operators who have not abused their market power, most consumers see reform of the cable in dustry as a sensible and necessary step to iake.1 (Sen. Howard M. Menenbaum (D-Ohio) sits on the Judiciary Committee.) f