Cable Celebrates Telecom Act Birthday

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Marking the sixth anniversary of the Telecommunications Act of 1996, the
cable industry is telling Congress that the deregulation law spurred an
investment boom that brought a host of new services to cable customers.

Six years ago on Feb. 8, President Clinton signed the bill into law after
years of skirmishing on Capitol Hill by the cable, broadcasting, local phone and
long-distance companies on how to knock down regulatory barriers to
competition.

Since that time, cable operators have spent about $55 billion -- or about
$1,000 per affected customer -- to provide customers with digital-video,
high-speed-data and local phone service.

In a Feb. 8 letter to Congress, National Cable & Telecommunications
Association president Robert Sachs said the regulatory stability that the law
promoted made cable's investment surge possible.

Cable operators, Sachs said, have signed up 15 million digital-video, 7
million high-speed-data and 1.5 million local phone customers. In all three
business segments, he added, cable operators face healthy competition.

'Not only do customers have more advanced services available to them, they
have more providers to choose from,' Sachs said in the two-page letter.

Consumer groups marked the occasion by asserting that cable rates continue to
soar higher than inflation, but Sachs said that since 1999, when partial cable
deregulation took effect, cable prices have risen 'only 1.4 percent over the
rate of inflation' as measured by the Consumer Price Index of the Bureau of
Labor Statistics.

The United States Telecom Association, which represents the local phone
industry, said Congress needed to update the 1996 law to free local phone
companies from burdensome regulations that do not apply to cable, especially in
the provision of high-speed Internet access.

'It was one thing back in 1996 for U.S. policy to encourage needed
competition in the voice market. It's another thing today to have U.S. policy
help the cable industry dominate communications in the 21st century,' USTA
president Walter McCormick said.

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