Who’s Worse Off — Cable or Telcos?


Trade groups for the cable and telephone industries teed off on one another publicly last week to see which multimillion-dollar faction could argue it was more abused by the other multimillion-dollar faction.

The National Cable & Telecommunications Association jabbed at the Bell companies, accusing them of distorting the truth in ads they are placing across the country promoting reform in video franchising. The NCTA put out a 10-page list, titled “Phone Companies and the Truth: A Bad Connection,” that detailed points made in telco ads and countered them with cable-industry arguments.

The No. 1 gripe: the telephone industry’s use of statistics from a Federal Communications Commission study, which said cable rates have risen 86% in the last 10 years. The NCTA counters the statistic does not account for channels added to those basic packages during the decade. Add in a 20% cost of living increase over the span and the cost per channel has actually decreased, the NCTA argues.

“I’d like to see them sell the per-channel argument to their customers,” Michael Balmoris, executive director of public affairs for AT&T Inc., responded. “Everyone recognizes the facts: Cable rate increases occur each year like clockwork. If cable wants to argue the numbers, they’re not our facts, they’re government-sourced. Take it up with them.”

The NCTA also criticizes claims that Bells need legislative changes in order to compete, that competition will automatically bring prices down and that civic groups, other than those backed by the Bells, support the telco agenda.

USTelecom, a telephone-industry lobby, counterpunched with a public accusation of corporate censorship of free speech.

The trade group’s CEO, Walter B. McCormick Jr., referred to the refusal of Comcast Spotlight, Comcast Corp.’s advertising-sales arm, to accept ad buys backing USTelecom’s preferred franchising-reform ideas. Comcast Spotlight handles inventory for Comcast and four other Washington, D.C., area cable firms.

McCormick said similar ads have been refused in Texas, Indiana and Missouri.

Brian Dietz, vice president of communications for the NCTA, said, “Instead of whining about their false and misleading ads being rejected, the phone monopolies should withdraw their ads and start telling the truth. They’ve played fast and loose with the facts for so long that they’ve forgotten they could have been competing in the video business for the last 10 years instead of waiting for sweetheart deals.”