The Senate overwhelmingly approved a massive cable television bill yesterday that creates a uniform nationwide regulatory structure for the fast-growing industry and limits the power of local governments to regulate cable operators.
The deregulation bill would limit the fees that cable firms could be required to pay to a franchising authority to 5 percent of annual revenues, would require local authorities to renew cable franchises except under special circumstances, and would restrict annual fee increases charged to subscribers to an amount equal to inflation.
The vote in favor of the bill was 87 to 9. But the key tally was an earlier 55-to-44 rejection of an amendment by Sen. James Abdnor (R-S.D.) that Senate sponsors of the measure and cable industry representatives said would have defeated the whole purpose of the bill.
Abdnor, who was depicted by his opponents as carrying the ball for American Telephone and Telegraph Co., argued that the bill would drive up rural and local residential telephone costs by allowing unregulated cable operators to compete for data-transmission clients with state-regulated telephone companies. In a bid to protect telephone company revenues against such inroads, Abdnor sought to make cable companies subject to the same regulatory restrictions as the phone companies in any areas where they compete.
Once that amendment was rejected, the bill had a clear passage to Senate approval. It now goes to the House, where the leading cable authority, Rep. Timothy Wirth (D-Colo.), chairman of the telecommunications subcommittee, is expected to support it.
The Senate bill was shepherded through months of difficult negotiations by its chief sponsors, Sens. Bob Packwood (R-Ore.), chairman of the Commerce Committee, and Barry Goldwater (R-Ariz.), chairman of the communications subcommittee. They said it represents a compromise between the cable industry, which said it was hampered by proliferating and sometimes conflicting local regulations, and the cities, which wanted to control operations and increase their revenue from cable operators.
"This is a good step forward," said Thomas E. Wheeler, president of the National Cable Television Association. "Up to now, cities made up their own rules, and they sometimes changed them as they went along. You've got to have some homogeneity--this says there will be a major role for local governments, but within guidelines."
Sen. Alan Dixon (D-Ill.) argued against the bill to the end. He said the provision requiring franchise renewal if there is no compelling reason to cancel "put the burden on the community" instead of on the cable operators.