Is Congress on the verge of answering cable-television subscribers' growing complaints about soaring rates and lousy service?
It would seem that way to hear it from congressional proponents of a pair of cable re-regulation bills in the House and Senate. "... Millions of subscribers are fed up with highprices and 'who-cares' service," declared Sen. John Danforth (R-Mo.), a member of the Senate committee that passed one of the bills last week. "The message is that help is on the way."
But even assuming one of the bills meets Congress's final approval -- a big "if," considering the backlog of bills jamming the legislative agenda -- consumers ultimately may find that only a little help is on the way. Even those within the cable business say the proposed legislation would, at best, forestall only the most egregious price-gouging.
"My sense is, as of now, most companies don't have much to worry about," said John Mansell, a cable industry analyst with Paul Kagan Associates.
Cable rates have increased by as much as 125 percent in some communities in the 2 1/2 years since Congress took the power to set rates out of the hands of local authorities, although in recent months, industry-wide increases appear to have slowed. The General Accounting Office is expected to issue a study today on cable prices since deregulation.
During this period, regulators and operators have contended with numerous consumer complaints about the level of service provided by cable franchises, from missed service calls to interminable busy signals at franchise switchboards.
The Senate bill, and a slightly weaker version in the House, would re-establish local rate-setting authority, but only for a very basic "tier" of service that would include transmission of network and public broadcast signals. This is to protect the small minority of viewers in remote areas who rely on cable to transmit otherwise inaccessible broadcast signals.
Local officials still would have no jurisdiction over the prices operators charge for the most popular cable programming, such as Cable News Network, the ESPN sports network and the pop music network MTV.
Price increases for these services could be repealed only by the Federal Communications Commission and only if the FCC determines that the new prices are "significantly excessive."
The Senate bill leaves it to the FCC to write the regulations that would define "significantly excessive." Meanwhile, premium services -- HBO and pay-per-view events -- would remain unregulated.
The bills also would direct the FCC to write its own customer-service regulations if it finds that the industry's are ineffective. But in February, the cable industry, in something of a preemptive strike, announced a series of voluntary service guidelines for operators that observers suggest would likely satisfy the FCC.
Although it's not known how it would define "significantly excessive," the FCC would have to consider a number of factors, such as an operator's investment in new equipment and programming, before it could order a rate cut, a cable-industry source pointed out. In fact, industry officials view the measures addressing rates as a "bad actor" clause aimed at only the most abusive operators, such as those seeking to speculate in the cable-station market.
"I would think your prices would have to be dramatically out of line" to cause the government to take action, said the industry source, who asked not to be named.
"We can live with that," the source said.
Of greater concern to the cable industry are provisions in the bills that would alter the structure of the business, and that could, over the long term, enable competing technologies such as direct-broadcast satellite services and so-called wireless cable to grow into effective competitors. For example, the Senate bill would require system owners to share with the satellite services and wireless cable companies programming that the system owners now carry exclusively.
The idea is that by having such programs, the alternative services would become attractive to viewers, and force cable companies to compete with lower prices. However, the cable industry fears giving up its exclusive programs would wipe out its most attractive selling point.