Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: TUESDAY, February 22, 1994                   TAG: 9402220249
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A-7   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium

FCC TAKES ANOTHER CRACK AT CUTTING CABLE TV RATES

It's not clear how much the rates for service and equipment will be cut when the commission meets today. But cable industry executives said cuts could range from 5 percent to as much as 15 percent.

When the FCC adopted cable price rules last April, it predicted that rates for regulated services would go down at least 10 percent for two-thirds of the 57 million cable subscribers.

Some did. Other rates went up - an unintended consequence of the regulations, which cover virtually all 11,000 cable systems, the FCC has said.

The 1992 Cable Act gave the FCC authority to oversee rates for channels not included in the basic package - channels like ESPN and MTV - and any special equipment needed to deliver those channels. Rates for premium services, such as HBO, are not regulated.

Basic service generally consists of broadcast signals; public, educational and governmental access channels; and a few cable channels, such as CNN. Rates for that service are regulated by local governments, who also regulate rates for more common equipment, such as convertor boxes and remote controls.

FCC economists and attorneys are refining the new rate structure and none would discuss either the size or scope of the expected cuts.

What the economists has been wrestling with is how best to estimate what price a local cable system would charge if it had competition. Only 3 percent of the nation's cable systems compete with another cable provider.

Cable rates were virtually unregulated until Congress in 1992 directed the FCC to craft a rate structure that was unveiled in April.

Not only was there no regulation, there were no records of what cable companies were charging, which has made it difficult to determine a fair rate structure.

The cable industry has been furiously lobbying the FCC not to cut rates dramatically, warning it could cripple cable investment in a national information superhighway and stifle jobs creation.

"If there are deep cuts in the range of 5 to 15 percent, cable companies' ability to invest in programming and new technologies will be seriously damaged," said Decker Anstrom, president of the National Cable Television Association, the industry's main lobbying group.

The Consumer Federation of America has been urging the FCC to slice cable rates by another 18 percent. "We want the whole enchilada," said Bradley Stillman, the federation's general counsel.

That's not likely to happen because the FCC rejected a similar appeal last year.

The FCC doesn't automatically review the rates for the services it regulates - it waits for a complaint from cities or consumers.

But consumers who want to complain about the rates they've paid since Sept. 1, when the rates were first regulated, must do so by Feb. 28.

After that, consumers can only challenge what they pay for expanded basic service if the rate goes up.

Few such complaints have been filed. And with the deadline rapidly approaching, consumer groups and federal lawmakers have been trying to heighten awareness. Sen. Howard Metzenbaum, D-Ohio., on Feb. 15 sent letters to mayors of the nation's 200 largest cities, urging them to file complaints to the FCC.

\ WHO RULES CABLE?\ SERVICES COVERED BY THE FEDERAL COMMUNICATIONS COMMISSION'S CABLE-RATE\ REGULATIONS AND THE REGULATORY BODY RESPONSIBLE FOR OVERSIGHT\ \ LOCALLY REGULATED: Basic service programming: generally includes local broadcast signals and public, educational and governmental access channels. May also include, depending on the system, cable channels such as C-SPAN and advertising-supported channels such as CNN. Basic service equipment: converter boxes, remote controls and additional cable hookups.

\ FCC REGULATED: Programming beyond basic: defined as cable channels that are advertising-supported and not included in the basic package. A sample includes ESPN, USA Network, TBS, Nickelodeon and The Discovery Channel. Equipment: All of the equipment to receive these services is the same as that needed for basic service and would be regulated locally. Should special equipment be needed, the FCC would regulate.

\ NOT REGULATED: Premium services, such as HBO and Showtime, and pay-per-view programming, such as sports events and concerts or the equipment, such as a special remote control or converter, to receive them.