MARKEYS SUNSET STRIP Bill Would Delay End of Rate Regulation


Washington -- Rep. Edward J. Markey (D-Mass.) dropped hislong-awaited legislative bomb on the cable industry last week, introducing a measure topostpone the sunset date when cable will become deregulated.

Markey has 22 co-sponsors -- including three Republicans --for his proposal to push back the March 31, 1999, deadline for the Federal CommunicationsCommission to cease regulating cable. "Without a legislative change to extendconsumer price protections ... consumers will be hit with a cable-rate El Niño,"said Markey, the lead Democratic member of the House Telecommunications Subcommittee.Thecable industry, while voicing concern about the Markey bill, was confident that theRepublican-controlled Congress would reject the bill.

"There's not much sentiment in Congress right nowfor reregulating the cable industry," said Decker Anstrom, president of the NationalCable Television Association, quickly adding that cable will aggressively fight themeasure.

Anstrom said cable is more concerned over Rep. HowardCoble's (R-N.C.) copyright bill, which, he said, "has more legs."Coble's bill would allow satellite companies to retransmit local signals back into alocal market, give the industry permanent compulsory licenses and eliminate the 90-daywaiting period for satellite customers who were previously cable subscribers.

Most Republicans appeared to have little appetite forincreasing cable regulation, preferring instead to focus on expanding competition byhelping such rivals as direct-broadcast satellite companies to get greater access toprogramming.

"It is premature to talk about regulating beforederegulation," said Ken Johnson, a spokesman for Rep. Billy Tauzin, (R-La.), chairmanof the House Telecommunications Subcommittee, who said the measure lacks House or SenateRepublican leadership backing.

But Johnson also said that if Congress is unsuccessful,Tauzin will consider supporting a measure to allow the FCC to continue regulating on amarket-by-market basis next year."We are not going to unleash on the American publican unregulated monopoly," he said.Markey's bill calls for cable operators to winderegulation when there is "effective competition" in a market area. That'sdefined as when a competitive service earns more than 15 percent of the households in afranchise area, or if a local telephone company is providing competingservice."[March 31, 1999] was chosen by lawmakers two years ago on the premise thatthe phone industry would have entered the cable business by this point in a massive way.Clearly, such competition has not materialized in a significant way," Markey said.Infact, since Congress passed the 1996 Telecommunications Act, four local telephonecompanies -- Ameritech Corp., BellSouth Corp., GTE Corp. and Southern New EnglandTelecommunications Corp. -- have entered the multichannel video market.A recent FCCevaluation of that market found that competition is lacking in most communities.Correspondingly, the report found that rates for regulated cable programming jumped 8.5percent from 1996 to 1997.The Consumers Union and the Consumer Federation of Americapetitioned the agency in September to freeze cable rates. But the FCC is not consideredlikely to take that approach, although it might make incremental changes, such asprohibiting operators from passing on increased programming costs to consumers.

While supporting Markey's bill, Gene Kimmelman,Washington director of the Consumers Union, said he is "concerned that theseprotections wouldn't add up for the consumer unless the FCC tightens theirregulations."In a speech last week at the Texas Cable Show, Anstrom cautioned thecable industry to "be careful, really careful," about raising cable-subscriptionrates."I urge you to make that a top priority," he said. "Don't giveour critics hand grenades that they can throw back at us."NCTA executives reiteratedthe call for cautious communications in panels at the trade show. They reminded operatorsthat a survey on rate-related customer communication commissioned by the NCTA last yearshowed that consumers don't buy cable's two most-used rate-increase rationales-- cost comparisons (it only costs "about $1 a day") and explanations aboutrising programming costs -- said David Pierce, the NCTA's director of publicaffairs."It's like McDonald's," he said. "Customers don'tcare what the hamburger costs -- they only care what they pay for the Big Mac."StatesNews Service

Leslie Ellis contributed to this story.