After two days of furious back-room politicking, a House subcommittee yesterday approved a bill that would make it tougher for cable television operators to dramatically increase the rates they charge subscribers.
The bill, passed on a unanimous voice vote by the House telecommunications subcommittee, is slightly tougher on the issue of rate regulation than a similar bill passed by the Senate Commerce Committee earlier this month.
Under the House bill, consumers would have to show that their cable rates are "unreasonable" compared with those of a similar-sized cable operator to win a rate rollback. In the Senate bill, consumers would have to prove that an operator's rate increase was "significantly excessive," based on a complex set of factors, before the Federal Communication Commission would be permitted to intervene.
The draft of the legislation was rewritten three times Tuesday and early yesterday to reconcile the interests of an array of competing interests -- broadcasters, cable-system owners, program producers, direct-broadcast satellite advocates, "wireless" cable companies and telephone companies, among others.
Despite the stronger rate-regulation standard, the cable industry appeared to score victories on two cherished side issues during yesterday's committee action. First, the cable lobby was able to push through a compromise that will make it more difficult for the industry's competitors to gain access to the programs that now run exclusively on cable television stations. Further, an amendment that would have allowed telephone companies to compete with cable operators was withdrawn before the bill came to a vote.
The issue of "program exclusivity" has been a heated one during the months of debate over the re-regulation bill.
The issue essentially boils down to a face-off between two powerful interests: cable companies, which now carry such fare as ESPN and CNN on exclusive basis, and an upstart competitor, Sky Cable, a proposed direct-broadcast satellite (DBS) service bankrolled by four giants, including Rupert Murdoch's News Corp. and General Electric Co.'s NBC unit. Sky Cable has been seeking to break cable's exclusive hold on its programs to make itself into an attractive alternative to cable.
In a blow to the cable industry, the Senate bill passed earlier this month gives no assurances to cable operators that they can buy their programs on an exclusive basis. But the House version passed yesterday allows the industry to make exclusive program deals provided that they don't break antitrust laws.
Separately, Reps. Rick Boucher (D-Va.) and Edward Madigan (R-Ill.) scrapped a plan to introduce an amendment that would allow the phone companies to offer cable service. Boucher, who noted that the measure did not have enough votes, said he would present the amendment to the House Energy and Commerce Committee as a separate bill next month. Nevertheless, the powerful National Cable Television Association said it would not support the House bill because of its opposition to the rate-regulation and program-access provisions. The bill now moves to the Energy and Commerce Committee, where it is expected to be taken up after the July 4th holiday.