Markey Mulls Rate Bill; Cable Fights Efforts

Author:
Publish date:
Updated on

Washington -- Cable-industry leaders say they won't let the
regulatory vise close tight without a fight.

As Rep. Edward Markey (D-Mass.) last week tried to drum up
support for a bill that would extend the sunset of cable-rate regulations, cable leaders
warned that this effort and others to freeze rates would scare off investors and cripple
hopes of bringing competition to phone and data markets.

'That's the thing that government tends to
forget,' said James Robbins, president and CEO of Cox Communications Inc. 'There
are investors out there that are putting their money in this business, and the bets are
bigger today than they have ever been.'

Robbins was in Washington, D.C., last week on a two-day
visit that included stops at the Federal Communications Commission and Congress.

Two weeks ago, National Cable Television Association
president Decker Anstrom delivered the same message in a speech that warned Washington
policymakers to expect a battle royal if efforts to regulate his industry start to gain
traction.

Markey wants to continue FCC regulation of large cable
operators' basic and expanded-basic tiers beyond March 31, 1999. On Jan. 28, he sent a
letter to his House colleagues trying to drum up support for the bill before its formal
introduction in a few weeks.

Markey warned that cable subscribers need protection beyond
March 1999 because competition to incumbent cable operators was insufficient to restrain
cable-rate increases.

'Let me go out on limb here,' Markey said, wryly.
'Without consumer price protections, unregulated cable monopolies will probably raise
rates excessively.'

In recent days, FCC sources said the agency is looking at
ways to insulate cable subscribers from rate increases. Some in the agency are advocating
cable operators subtracting a portion of advertising revenue and programmer payments --
marketing support, launch fees and home shopping commissions -- from programming-cost
increases.

Robbins said he opposed both Markey's measure and any of
the FCC actions being considered.

'It's micromanagement of the highest order, which, I
think, is out of order,' Robbins said of the FCC proposals.

Cox spokesman David Andersen, who joined Robbins in
Washington, downplayed the trip as nothing out of the ordinary.

'This wasn't a special visit. We do this on a regular
basis,' Andersen said. 'We didn't see any members of Congress.'

Robbins briefed reporters about Cox's ongoing campaign to
roll out residential telephony, digital cable and high-speed cable-modem services in nine
U.S. markets that cover 85 percent of Cox's 3.4 million-subscriber base and that include
290,000 small businesses that Cox hopes to lure away from the Baby Bells with its bundled
offerings (see related story).

The investments, Robbins said, demonstrated the fact that
Cox is seizing the opportunity to compete, as was expected by the authors of the
Telecommunications Act of 1996, which marked its second birthday Feb. 8, to mixed reviews.

'You can't have it both ways -- you can't on the one
hand want a competitive landscape and on the other sort of clamp down on those people
providing it,' Robbins said. 'That's my worst fear.'

A House source tracking cable issues closely said Markey's
bill is a long shot today. But cable rates are so politically sensitive that Markey could
pick up support as the year goes on.

'I haven't gotten a lot of calls from members' offices
concerned about rate regulation. Having said that, this is the one issue that I think
everyone is not willing to bet the farm on,' the House source said.

Another idea kicking around the FCC and Congress is a
requirement that cable operators expand consumer choice by offering a greater number of
programming services a la carte.

Echoing Anstrom the week before, Robbins said he would
resist any policy compelling a la carte services.

'Playing with the fundamentals of the business through
the hand of government is not the right way to go at all,' Robbins said.

Related