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House Panel Expected to Approve Bill Deregulating Cable Rates

May 17, 1995

WASHINGTON (AP) _ Betting that more competition would protect cable television customers from rate gouging, House Republicans moved forward today on a plan to eliminate regulations that have held down monthly rates.

A provision to deregulate cable rates is part of a large bill that would revamp the nation’s 61-year-old telecommunications laws, freeing local and long-distance telephone companies and cable TV companies to get into each others’ businesses.

Supporters of the bill say the added competition for cable is more likely to benefit cable customers by restraining prices and by expanding services.

Opponents say the measure would lead to higher cable rates.

Rep. Edward Markey, D-Mass., who planned to fight the deregulation provision, said it puts a hole in the overall goal of the bill to bring competition to all segments of the telecommunications industry, ``a hole big enough to be dangerous for many of those we are trying to help,″ he said.

Under the bill, ``cable companies are deregulated whether they face competition or not,″ Markey said.

The House Commerce telecommunications subcommittee _ the same panel that wrote cable rate regulations less than three years ago when it was controlled by Democrats and led by Markey _ is expected late today to approve the deregulation bill.

Two forces are behind the change: Republicans, who were reluctant to regulate rates in the first place in 1992, are now in charge of Congress; and potential cable competitors _ notably high-powered satellites and telephone companies _ are looming larger than ever.

Under the GOP bill, rates for ``small″ cable companies _ defined as having less than 1 percent of all cable customers nationwide _ would be deregulated immediately. Rates for the remainder of the systems would be deregulated once a competitor moves into a local market or within 15 months after the bill becomes law.

Since rate regulation took effect in September 1993, cable customers have saved $3.5 billion, or $4 a month per customer on average, according to the Federal Communications Commission. The regulations apply to most of the country’s 11,000 cable systems.

Markey and other opponents of deregulation say the telecommunications bill would leave cable customers vulnerable to big rate increases.

It could take years for every cable community in the country to have more than one cable company, deregulation opponents say. Right now only a handful of communities have competing cable companies.

Supporters of deregulation say cable companies, facing new competitors, would be especially sensitive to pricing and consumers would gain access to new products and services.

Because the bill makes it easier for a phone company to offer cable television service, ``if a local cable company does something outrageous ... people will just walk,″ said Rep. Thomas Bliley, R-Va. ``The business will just go, pure and simple.″

Bliley, chairman of the House Commerce Committee, co-wrote the bill with Rep. Jack Fields, R-Texas, chairman of the telecommunications subcommittee.

Decker Anstrom, president of the National Cable Television Association, agreed. ``Consumers will have something they didn’t have in 1992 _ a choice of companies to buy cable television from,″ he said.

Backed by the White House, Markey and the committee’s ranking Democrat, John Dingell of Michigan, co-authors of the 1992 law, plan to fight in the subcommittee to temper the cable provisions in Bliley’s bill.

But, Markey conceded, ``It’s an uphill battle.″

To avoid other subcommittee battles with Democrats, Republicans held off on amendments that would deregulate the TV and radio industries and lift restrictions on media cross-ownership. Instead, they will wait until the bill is considered by the full committee.

A slew of other amendments were expected to be discussed but not formally offered until the full committee meets next week. Those amendments include making it easier for local phone companies to get into the long-distance business, permitting utilities to provide telecommunications services and studying smut on computer services.

On local phone company entry into the long-distance business _ the heart of the bill _ Fields toughened one of the entry conditions. Local phone companies would have to face competition in both the residential and business markets before they could provide long-distance service.

Markey’s amendment would tighten the test for deregulating cable rates, stipulating that a cable competitor must first be authorized to provide customers with ``comparable video programming.″

The amendment also would preserve cable customers’ current right to contest rates for the most popular cable programs by eliminating a provision in the Bliley bill that would require at least 5 percent of a company’s customers nationwide to file rate complaints before federal regulators intervene.

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