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Socialist Rep. Wants State Cable Regs

7/19/2001 9:29 AM Eastern

The lone socialist in the U.S. House of Representatives is planning to
introduce legislation that would allow the 50 states to regulate cable rates
within their borders.

Rep. Bernard Sanders -- who runs as an independent in Vermont but describes
himself as a democratic socialist -- has yet to introduce the bill. However, he
sent a letter to House members July 16 explaining the details of his future
plans.

According to a draft of the bill, the new law would allow states to regulate
all cable prices instead of just basic rates and would freeze cable rates for
one year after enactment to give states time to establish their regulatory
regimes.

The bill would also allow states 'to address cable consumer concerns,
consistent with local telecommunications needs,' Sanders' letter said.

The Federal Communications Commission lost its authority to regulate
upper-tier cable rates March 31, but local governments may price-regulate basic
rates if local cable operators are not subject to effective competition.

Generally, effective competition means that cable operators face competition
from a video-providing phone company or have lost 15 percent market share to all
multichannel-video-programming distributors in a market.

Vermont -- where Adelphia Communications Corp. is the dominant cable operator
-- has the highest level of direct-broadcast satellite penetration among the 50
states. DBS providers serve 41 percent of Vermont TV households. But Vermont
residents -- especially seniors -- have apparently been voicing complaints about
cable rates to Sanders.

In his letter, Sanders said cable deregulation in the Telecommunications Act
of 1996 has caused cable rates to rise 33 percent, 'far outpacing the economy's
overall rate of inflation.'

Sanders said the law promised more cable competition and lower rates, but '60
percent of cable subscribers are in the hands of just three companies, and
prices are rising fast.'

According to recent FCC cable-price surveys, cable rates have gone up in the
aggregate slightly faster than inflation. But on a per-channel basis, adjusted
for inflation, the FCC's data showed that cable rates have actually declined,
meaning that operators have added channels just as fast as they have raised
their rates.

The National Cable & Telecommunications Association declined to comment
on the pending Sanders legislation.

In May, Rep. Barney Frank (D-Mass.) introduced a bill (H.R. 1842) with one
cosponsor that would revive the FCC's cable-rate-regulation authority. The bill
currently has 15 cosponsors, all of them Democrats.

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