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Wednesday, May 06, 1998
Cable TV companies told to keep rates down
Associated Press
ATLANTA -- With cable television rates rising sharply, the industry's top executive is urging companies to hold prices down to keep the government from changing its mind about deregulation.
"There is not a speech I give or a meeting I have in which I don't say to the industry, `Look, you need to be really, really careful about price increases,' " Decker Anstrom, president of the National Cable Television Association, said. "We know there is a sensitivity there both with our customers as well as policy-makers."
One of those policy-makers, Federal Communications Commission Chairman Bill Kennard, reminded the companies Tuesday at their annual convention that his agency has an obligation to protect consumers. He urged the companies to "show restraint" in rate increases.
According to the government's most recent figures, cable TV prices rose 7.9 percent for the 12 months ending March 31. Overall inflation was just 1.4 percent during the same time period.
The average monthly rate, including a remote and converter, was $28.83 as of July 1, according to FCC figures.
As it now stands, the FCC's authority to regulate cable rates expires March 31, 1999, unless Congress changes that as consumer groups have requested.
A House bill would extend the agency's rate-making authority until customers could buy service from competing local companies.
Congress set the expiration date in a 1996 telecommunications bill that freed cable, local and long-distance telephone companies to get into each other's businesses. The rationale: Regulation no longer would be needed because competition to cable would restrain prices.
The cable industry says that with each rate increase, customers have gotten more channels, improved service and better picture and sound quality. The industry also says the number of cable customers -- now about 67 million -- continues to grow about 1 percent to 2 percent a year.
Cable's share of the multichannel video market last year was 87 percent, down from 89 percent in 1996. Competitors -- direct-broadcast satellite, backyard satellite dishes and wireless cable -- had 13 percent of the market, up from 11 percent in 1996.
In an effort to protect customers from rising rates, Kennard has directed the FCC to take a new look at its regulations that allow cable system owners to boost rates to cover increases in programming costs. The industry says those increases are the biggest factor in higher rates.
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