Congress gets earful on program accessFair-price-guarantee law expires in March 11/01/2008 08:00:00 PM Eastern
Opening salvos were fired last week in the coming legislative battle over video distributors' access to programming.
A law that requires cable companies that own both systems and programming networks to make their programming available to all customers at fair prices expires next March, so Congress is preparing to re-examine it.
Cable industry representatives, speaking before the Senate Antitrust Subcommittee, didn't go so far as to ask to be rid of the law, but National Cable & Telecommunications Association President Robert Sachs pointed out that there are 224 national cable networks today, as opposed to 76 in 1989.
Sachs also said that vertical integration among cable operators has dropped from 53% in 1989 to 35% last year. Sachs also has said in the past the cable industry would like to see the law completely voided.
There is some sentiment in Congress to renew program access, which Congress passed as part of the 1992 Cable Act. Democrats, in particular, favor maintaining it. Last week, ranking committee member Herb Kohl (D-Wis.) said "the best way to ensure that consumers pay the lowest prices possible and have the highest quality of service is to increase the competitive choices."
To do that, Kohl said, Congress should consider three proposals: extend program access beyond 2002; consider legislation that would allow companies to compete to offer services to consumers who live in apartments; and open up competition among providers of set-top boxes.
Cable competitors testifying at the hearing—RCN and DirecTV—said they have trouble gaining access to local sports nets owned by Comcast in Philadelphia and Cablevision in New York.
Sen. Arlen Specter (R-Pa.) said that behavior concerned him—going so far as to threaten to bring cable companies in with subpoenas—and pointed to an incident in which Comcast refused to give RCN a long-term programming deal for Comcast Sports Net until Specter met personally with both parties. He said, "I wonder why that had to come about in a senator's office."
Consumers Union Co-director Gene Kimmelman told the committee that cable rates continue to rise at three times the rate of inflation, a complaint to which both Kohl and Subcommittee Chairman Mike DeWine (R-Ohio) seemed sympathetic. He asked, "Can consumers expect to see cable rates decrease any time soon, or, rather, are they going to see cable rates increase and increase and increase?"
Kimmelman said, "There is no sign of meaningful price competition in sight. [We] believe the need for policymakers to curtail abusive practices of cable monopolies is long overdue."
In cable's defense, Sachs cited a recent FCC report that found that cable subscriptions costs are actually going down on a per-channel basis. He said, "As cable systems are upgraded and new satellite programming services are launched, cable operators have added new channels that consumers want."