Cable Reregulation: Caging the Gorilla
CONGRESS may finally be getting the point about rising cable-TV fees and servicing problems. Reacting to a crescendo of consumer outrage, the Senate on Tuesday voted 74-25 to establish federal regulations on cable. The House voted last week to reregulate cable by an equally lopsided 280-128. The margin in both chambers would be enough to override a threatened presidential veto, although the same support can't always be counted on the second time around.
And to think it was only nine years ago that Congress and the Reagan administration decided it was high time to let cable TV join the club and become deregulated, along with the many other industries that were also being cut loose.
Up to 1984 Congress had been almost slavishly protective of broadcasting. Elected officials were so dependent on it for favorable TV exposure, they obligingly kept its fledgling competitor, cable, a poor relation, placating broadcast-station owners by loading cable down with restrictive rules. But by 1984 the idea was to give the cable industry some room to grow.
It did more than grow. It became a "monster," according to Rep. Christopher Shays, (R) of Connecticut, who said so at a recent cable hearing, "and now we are paying the price." A report from the New York advertising agency Saatchi & Saatchi concludes that cable has survived the current economic slump "better than virtually every other television segment." Local cable companies have been jacking up fees much faster than the inflation rate over the past several years and enjoying other fruits that come fro m the monopoly they enjoy in many communities. If your local cable company is the only game in town, whom do you turn to if it doesn't handle your service complaints until it feels like it? The bill wants you to able to say, Heck, I'll go with satellite-delivery instead, or maybe `wireless' cable.
Nothing would get the cable companies' attention faster than the two-by-four of some practical consumer alternatives. Cable rates do seem to be lower where systems face some kind of competition - as much as 30 percent lower according to some consumer advocates. In fact, that's the Bush administration's answer too. The president called for "greater competition, entrepreneurship, and less economic regulation" in a letter to House and Senate leaders.
The trouble is he doesn't want to do much about it in the meanwhile. And that's when most consumers will be watching cable - in the meanwhile. So the current bill would let the Federal Communications Commission set "reasonable" rates and make sure cable companies don't simply add those charges to converter boxes or remote-control devices.
The bill also makes the industry more accountable in other ways, like requiring a quicker handling of customer questions and complaints.
But for cable companies, the real heresy is a provision to make them pay for carrying local broadcast TV stations. What! they say. Pay for something we've been picking up free all these years? The cable industry says that might cost them $1 billion a year. Not only do they now get these broadcast signals free, but they can put them on any channel they wish: Broadcast Channel 4 may become cable Channel 27, for instance. The bill lets broadcasters negotiate to keep their channels the same number.
The battle over the bill has been obscured somewhat by state and local primary votes and by the presidential campaigns, but ads have been flying thick and fast. On the car radio I've been hearing mainly pro-cable ads that employ that all-purpose argument about how the bill would actually raise rates rather than control them, as bill advocates claim. There have been anti-bill ads on cable stations, of course - that's fair enough - as well as stuffers in subscribers' monthly statements, also to be expected . Newspapers have carried full-page ads, and the cable industry has set up an 800 number people can call and have messages sent to their members of Congress free.
When cable was deregulated, it commendably seized the moment to catch up with its then-favored cousin, broadcasting. Now the shoe is on the other foot and cable has become, not an economic "monster" certainly, but perhaps a 500-pound gorilla who is due for some kind of controls.