Rate Reaction Not Always Negative
By Ted Hearn -- Multichannel News, 6/12/2001 6:23:00 AM
Chicago -- When cable rates rise in a community, it's not always the case that subscribers bury their lawmakers in angry letters.
Rep. Fred Upton (R-Mich.), chairman of the House Telecommunications and Internet Subcommittee, receives about 400 letters per week from voters, and rarely is he asked to take action against the cable industry.
'People understand that they are getting more, they are going to pay a little more and they are getting a great return on that investment,' Upton aide Will Nordwind said at a National Show session here Monday.
Nordwind cited Charter Communications Inc.'s rebuild of a system in Kalamazoo, Mich., in Upton's district, as an example where rates went up to cover upgrade costs and new services.
'We know they have built out that system with tremendous new benefits for the consumers. Rep. Upton has not gotten any negative mail about the cable companies,' Nordwind said.
Other congressional aides on the panel suggested that cable rates remain a hot political issue that requires cable operators to do a better job of explaining the relationship between cost and value.
'Maybe cable has to make a better effort in basically explaining to the public why your bill is increasing,' said Yardley Pollas, an aide to Rep. Bobby Rush (D-Ill.), a member of the House Energy and Commerce Committee, which oversees the cable industry.
Courtney Anderson, an aide to Rep. John Shimkus (R-Ill.), also an Energy and Commerce member, said rate hikes usually trigger a reaction from her boss' constituents.
'One thing you will see in congressional offices is that when the cable bill goes up or when you can't get a certain station . that's when you hear from the constituents,' Anderson said. 'The cost increases -- it really upsets people.'
But Anderson said cable rates look a lot better when compared with the cost of taking a family to the movies when the price of tickets and snacks are factored in.
'It really is a good deal if you put it into perspective,' she added.
Victoria Bassetti, chief counsel for the Senate Subcommittee on Antitrust, Business Rights and Competition, said Congress receives an 'almost staggering' amount of mail when cable rates go up, but she added that this in part reflects the importance of TV in the lives of millions of Americans.
'It's incredibly important to people,' she said.
But Bassetti said one problem cable faces is that people see the cost of consumer-electronic devices going down as quality rises, but they see cable rates go up with increases in quantity and quality.
'In terms of addressing attitudes, I am not sure there is a magic bullet,' she added. 'There is no way the cable industry can turn itself into the model of the consumer-electronics industry, but I think that's what [cable] is kind of going up against to a certain degree.'
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