News

Cable Seeks Clarity in Conn.

5/30/2008 8:00 PM Eastern

Operators in Connecticut that qualify to be regulated by a state — as opposed to a community — agency are also claiming the state agency has lost the authority to regulate basic rates.

While the companies press that point with the Department of Public Utility Control, they face a public-relations backlash from some consumers and local cable overseers who suspect operators Cox Communications and Comcast really want the ability to eliminate a low-cost basic cable package.

The regulatory role of the DPUC came into question after last year’s enactment of a state franchising law. It allowed incumbent operators to file for a state certificate of cable franchise authority 30 days after AT&T enters a local market with the U-verse “IPTV” multichannel video service.

Cox systems filed for the state certificate on March 13 and Comcast systems followed them on March 21.

Both had rate filings pending before the DPUC at that time, and they stated the DPUC should drop those proceedings.

Cox and Comcast separately want the Federal Communications Commission to determine they face “effective competition” in Connecticut, a ruling that would achieve the same result: the elimination of regulation on basic cable rates.

The DPUC opened the subject to written comments in April. The New England Cable & Telecommunications Association, backing incumbent operators, commented that because the requirement for earning a state certificate is the existence of a wireline provider, “the clear intent of the [state franchising] act is to terminate the DPUC’s authority to regulate rates for those certificated carriers.”

Whether that is the case or not, some commenters said they were worried that barring basic-rate regulation, incumbent cable companies might make it impossible for customers to buy only a low-cost, stripped-down version of basic cable — meaning local broadcast channels, public-access channels and a few satellite-distributed networks.

“The only reason to request deregulation of this rate of service would be a mistaken belief that some people will subscribe to a higher rate of service if 30 channels suddenly cost $30 and 60 channels cost $50. In trying to squeeze the last dime from customers some people will be priced out of the market,” wrote Stuart Arotsky, chairman of the Cable Advisory Council of New Haven, West Haven and Hamden.

Opponents of deregulating the cable firms note that AT&T does not offer a version of basic cable (retransmitted broadcast stations plus local access and a few satellite channels). That could open the door for cable firms to eliminate that packaging as well, as it won’t be needed to match something AT&T offers.

Comcast, at least, has made the case it has no plans to eliminate basic cable.

Comcast regional vice president Doug Guthrie in a radio interview said his company’s basic tier, averaging $12 to $15, in fact gives Comcast a competitive edge because AT&T does not have a similar tier.

Comcast has no plans to eliminate it, he said, and in fact it might help Comcast attract new customers who currently don’t buy cable but will be prompted to do so when digital signals replace analog broadcasts starting next February.

The comment period recently closed and the DPUC has not yet acted on the request.