Two days before a Senate hearing on cable rates, two consumer groups assailed the industry by alleging that market-power abuses brought on by premature deregulation generate between $4.5 billion-$6 billion annually in excess revenue.
"Cable's market power stems from a lack of effective competition," the Consumers Union and the Consumer Federation of America said in a 33-page report that concluded that cable deregulation has been a failure.
National Cable & Telecommunications Association spokesman Brian Dietz said the report ignored robust competition from EchoStar Communications Corp.’s Dish Network and DirecTV Inc. that has been recognized as a competitive check on cable by the Federal Communications Commission and the U.S. General Accounting Office, the investigative arm of Congress.
"By ignoring the many consumer benefits of cable's $85 billion investment in digital-broadband technology and the unprecedented choices that consumers have in today's video marketplace, the Consumer Federation once again demonstrates that it is not a credible voice on these issues," Dietz said.
The hearing Wednesday before the Senate Subcommittee on Antitrust, Competition and Business and Consumer Rights is scheduled to include testimony from Insight Communications Co. Inc. vice chairman and CEO Michael Willner, NCTA president Robert Sachs, CFA research director Mark Cooper, The Precursor Group CEO Scott Cleland and Knology Inc. CEO Rodger Johnson.