Conn. Won't Trim Franchises Over Rates


Connecticut regulators have rebuffed a petition from a group of state senators calling for reductions in franchise-renewal spans for cable operators that raise rates in excess of the cost-of-living index and fail to support community programming.

Operators called the petition an attempt at "backdoor ratemaking" by the frustrated legislators and praised the Department of Public Utility Control for rejecting it.

Last June, a group including state Sens. Kevin Sullivan (D-Bloomfield), Biagio Ciotto (D-Cromwell), Thomas Gaffney (D-Cheshire), Mary Ann Handley (D-Bolton) and Alvin Penn (D-Stratford), petitioned the DPUC to open a docket on cable regulation.

They wanted the agency to consider factors such as "excessive" rate hikes, reduced support for community-access programming and poor customer service when considering a franchise renewal.

The fact that the state has no specific authority to regulate cable rates beyond the basic tier does not mean "profiteering and poor performance should be rewarded with long extensions of near-monopoly privileges," they wrote.

The DPUC handles refranchising in Connecticut. New franchises can run in length from five to 15 years, but the legislators said 10 years had become the norm.

New tiers suggested

Legislators recommended the agency use its refranchising process to compel operators to offer a basic-only tier (consisting of broadcast TV stations, the state version of C-SPAN and local access channels); a "small, moderately priced expanded basic tier"; and optional à la carte or packaged offerings.

Backing them was the state Office of Consumer Counsel, which said rates that rise beyond the cost-of-living index should be a "more significant factor" in refranchising deliberations.

Consumer needs (defined by the agency as support for local access programming) should also play a bigger role, the OCC said.

Operators said shorter franchises would make it harder to obtain financing to invest in new technology.

Last week, the DPUC said in a draft it would take no action on the legislators' petition.

The agency said a formula suggested by lawmakers that compared prices and system productivity is pre-empted by federal law. And regulators disagreed that the ability to offer mini-tiers or à la carte offerings would save operators money, thereby cutting consumer rates.

The draft also dismissed claims that rate hikes can be linked to operators' financial investment in the programmers they carry.

"We're pretty pleased with the draft decision," New England Cable Telecommunications Association executive vice president Bill Durand said.

Legislators have one more shot at swaying the DPUC board, which will accept written arguments through Feb. 25.