Complaining that the costs of cable television are rising out of control, the Consumers Union Wednesday called on Congress to reregulate the cable industry.
"Public policy should match up with today's market reality, not with what
industry tells Congress market conditions will be next year, not what corporate
executives promise the market will look like if only policymakers deregulate a
little more," the CU said in a report. "Time has shown that the
promises of the cable industry and most telecommunications firms were worth
about as much as the air used to utter them."
The CU wants Congress and the Federal Communications Commission to
grant competitive multichannel providers access to spectrum without requiring
them to purchase it at auction. It is asking Congress to give states more
authority over cable providers.
The CU also thinks the FCC should write stronger limits on concentration in the
cable industry, which the FCC must rewrite since the U.S. Court of Appeals for
the D.C. Circuit struck down the FCC's 30 percent limit on ownership of cable
Finally, the CU wants the FCC to require cable operators to open their broadband
networks for competitors' use and to close all loopholes that limit cable
competitors' access to programming.
The organization said that since Congress passed the 1996 Telecommunications Act
cable rates have risen 45 percent, nearly three times the rate of inflation. The
National Cable & Telecommunications Association disputed that, however.
"The cable industry was deregulated in March of 1999, not 1996, and since
deregulation, price increases have moderated. According to the Bureau of Labor
Statistics, cable prices have exceeded the rate of inflation by 2.35 percent per
year since prices were deregulated, while they increased 5.34 percent during the
three years of regulation after 1996," NCTA spokesman Marc Smith said in a
prepared statement. "Finally, the report unfairly singles out the cable industry and
ignores the pricing pressures faced by all multichannel providers, including
DBS [direct-broadcast satellite], which have been forced to raise their prices, as well, to compensate for
increased programming costs."