Anstrom Issues Stern Warning on Rates

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Orlando, Fla. -- National Cable Television Association
president Decker Anstrom said last week that cable operators should be careful when
raising prices over the next few months to avoid a clash with Washington policymakers on
the eve of broad cable-rate deregulation.

With the March 31, 1999, cable-rate sunset looming, Anstrom
told an Eastern Show luncheon audience here that the cable industry had to guard against
handing its opponents "any hand grenades to throw back at us," or giving them
any reason to suspect that price gouging is occurring.

"You can be sure that every price increase will be
carefully scrutinized," Anstrom said. "In fact, those price changes are going to
be looked at more closely than the FBI looked at Monica's blue dress."

Congress will have the last word on whether the upper-tier
rates of large cable operators will remain regulated past March 31, because the FCC has no
independent authority to continue its price controls under the Telecommunications Act of
1996.

Jim Ewalt, executive vice president of the Cable
Telecommunications Association (CATA), told an Eastern Show audience that Congress will
permit cable deregulation to occur as scheduled, even though some on Capitol Hill would
like to see the sunset extended until more competition arrives.

"I am an optimist," Ewalt said. "I think it
will be recognized that it ought to sunset."

"I agree with that," said Susan Eid, vice
president of federal relations for MediaOne Group.

"I think it's going to expire, but we are going to
have to fight to keep it there," said Paul Glist, a cable attorney with Cole, Raywid
& Braverman.

Glist was evidently referring to legislation sponsored by
Reps. Billy Tauzin (R-La.) and Edward Markey (D-Mass.) that would allow local governments
to deny upper-tier deregulation if local cable operators failed to offer more than one
expanded-basic tier.

The bill would also require operators to sell basic tiers
that consisted only of local-TV signals and PEG-access (public, educational and
government) channels.

Anstrom said that when Congress convenes in January, he
expects lawmakers to continue working on a bill that would give direct-broadcast satellite
companies the right to offer local-TV signals.

He added that the NCTA would support DBS legislation as
long as its sponsors did not attach riders aimed at further regulation of the cable
industry, although he did not specifically mention the Tauzin-Markey bill.

"When Congress returns next year, we can be sure that
such legislation will be a priority, but we will fiercely oppose any new or expanded
government regulation or micromanagement of our business," Anstrom said.

As he has explained on prior occasions, Anstrom said
reregulation of cable -- whether an extension of the sunset, or tiering restrictions --
would hurt the industry's cash flow, spook investors and reduce investment in programming
and technology.

"More government price regulation will hurt our
customers," he said. "Reregulation of cable would be a colossal mistake, and we
will oppose it with all of our energy."

Over the past 12 months, the NCTA insisted that DBS firms
must comply with full and immediate must-carry obligations in exchange for cable's support
of the bill. In late September and early October, as efforts to pass the DBS
"local-into-local" bill intensified in the Senate, the association quietly
softened its position by agreeing to a phase-in of full must-carry obligations for DBS by
2002.

"I think we should respect competition, but we should
never fear competition," Anstrom said.

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