Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, September 18, 1993 TAG: 9309180219
SECTION: NATIONAL/INTERNATIONAL PAGE: A-1 EDITION: METRO
SOURCE: From The New York Times and The Associated Press
DATELINE: WASHINGTON LENGTH: Medium
"It's obvious there's a problem, but we'll have to find out the extent of it," said James H. Quello, the acting chairman of the commission.
Amid a torrent of complaints from angry consumers and members of Congress, the FCC announced that it would start a detailed survey of the prices charged by the 25 biggest cable companies.
The FCC is giving the companies just two weeks to respond. Quello acknowledged that the results might force his agency to rewrite the foot-high stack of rules it just painstakingly finished writing.
The announcement amounts to a big embarrassment for FCC officials, who until now strongly denied there was any problem. Indeed, Quello and other officials have issued several blunt statements insisting that any price increases for some customers were more than offset by declines for others.
The new rate regulations, which took effect Sept. 1, were issued in response to legislation Congress passed last October to rein in price increases and force cable companies to improve their service.
Since the cable television industry was deregulated in 1986, cable prices had been climbing at more than twice the rate of inflation - in part because all but a handful of systems enjoy monopoly franchises.
The new rules set up a compli- Since the cable television industry was deregulated in 1986, cable prices had been climbing at more than twice the rate of inflation. cated system of "benchmark" prices, and FCC officials had predicted that they would force rate reductions of more than 10 percent for about two-thirds of all cable systems.
But it has not necessarily worked that way, as consumers have been discovering in the last few weeks. Virtually reversing what the FCC had intended in writing the new rules, prices for basic and expanded services have gone up at many companies, while the cost for options such as additional outlets have gone down.
As consumers started to receive the new price lists by mail, they started flooding members of Congress with complaints. Aides to Rep. Edward Markey, D-Mass., who led the House fight to reregulate cable, said they had been getting 50 to 75 calls a day from consumers in the past few weeks.
Even before Friday's FCC announcement, Markey had scheduled a hearing on the matter for Sept. 28.
But it may be hard to determine where rates really stand for the nation's customers. For one thing, the regulations play out differently for each of the nation's 11,000 cable franchises, and the customers of one system may get rate cuts while prices go up for those in an adjacent town.
The public's anger over cable prices had led Congress to pass the cable bill last year over then-President Bush's veto.
The FCC was directed to issue and enforce price guidelines that would lead cable operators to charge rates comparable with those in markets with competition.
To do this, the FCC came up with a staggering collection of benchmark prices, which varied depending on the number of channels offered and the number of customers for a cable system.
But these benchmarks were total prices for all of the services the companies could offer. As a result, many companies found they could stay within the guidelines by dropping their highest prices for the fanciest level of service while raising the charges for more basic service.
The cable operators that will be surveyed are Tele-Communications Inc.; Time Warner Cable; Continental Cablevision Inc.; Comcast Corp.; Cablevision Systems Corp.; Cox Cable Communications; Jones Intercable Inc.; Newhouse Broadcasting Corp.; Cablevision Industries Inc.; Adelphia Communications; Times Mirror Cable Television; Falcon Cable TV; Viacom Cable; Sammons Communications Inc.; Century Communications Corp.; Crown Media Inc.; Colony Communications Inc.; TeleCable Corp.; Scripps Howard Cable; TKR Cable; KBLCOM Inc.; Lenfest Group; Intermedia Partners; Prime Cable; and Post-Newsweek Cable Inc.
by CNB