News

Cable Divides Hill, Powell, Tauzin

7/26/1998 8:00 PM Eastern

Newport, R.I. -- Policymakers in Washington, D.C., used
last week to demonstrate once again that there is a sharp division over cable regulation.

The Senate, in 63-36 vote, defeated an amendment that would
have given the Federal Communications Commission 30 days to review its cable rules and to
decide whether they needed to be tightened.

The amendment was sponsored by Sen. Russ Feingold (D-Wis.).
The opposition of Sen. John McCain (R-Ariz.), chairman of the Senate Commerce Committee,
and Sen. Ernest Hollings (D-S.C.), the panel's ranking member, helped to kill it.

Senate Minority Leader Tom Daschle (D-S.D.) said the
Feingold amendment, while well-intentioned, would prove little -- it would merely
demonstrate anew that FCC regulations had let cable rates rise sharply.

Daschle said an FCC study would be duplicative because he
and Sen. Byron Dorgan (D-N.D.) have already requested a report from the General Accounting
Office on the causes of cable-rate hikes.

"It is my expectation that this [GAO] review will
provide new evidence about steps that we need to take to help control cable-rate
increases," Daschle said.

McCain said the Feingold amendment was too broad a step,
indicating that it would pre-empt his July 28 hearing on cable rates, at which
Tele-Communications Inc. president and chief operating officer Leo J. Hindery Jr. and Cox
Communications Inc. president and CEO James Robbins are expected to testify.

Robbins said he plans to tell McCain's panel that
competition to cable is growing, and that efforts to restrain rates would be
counterproductive.

Meanwhile, FCC commissioner Michael Powell, speaking to
reporters here at the New England Cable Television Association convention, said cable
investment in new facilities, programming and services would screech to a halt if cable
rates were frozen.

"I think that you can potentially devastate the
progress that cable is making, and I certainly don't want to see that happen,"
Powell said. "I am as concerned as anyone about consumers, but the real question is:
Are they getting value? Are they getting more for the price increases?"

Powell said typical cable subscribers would be reluctant to
drop networks that they currently receive, even if it meant lower monthly cable bills.

"You'd be hard-pressed to go out to a consumer
and say, 'What would you want to take off at a lower price?'" Powell told a
NECTA audience.

He added that consumers form incredibly strong bonds with
cable networks.

"People get religious about their channels," he
said. Take away a golf fanatic's cable access to The Golf Channel, and
"they're ready to cause a war."

Powell's comments reflected a completely different
outlook on cable packaging from that of Rep. Billy Tauzin (R-La.), chairman of the House
Telecommunications Subcommittee, who is planning to introduce a cable bill forcing
operators to provide more choice in their programming packages.

Tauzin said operators that don't face competition from
a second cable system need to create smaller program packages to expand consumer choice
and rate flexibility.

"If consumers don't have a choice among
providers, they at least ought to have more choice from the provider that they've got
to use," Tauzin said. "Our bill is built around that simple notion, and we will
put more meat on it as we explain it next week."

Tauzin said direct-broadcast satellite would not qualify as
a second provider "because DBS does not yet have local signals."

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