Lawmakers eyeing cable rates

Jan 13, 2003  •  Post A Comment

If cable TV operators don’t put a lid on rates , Congress may do it for them.
That was the warning from Ken Johnson, spokesman for Rep. Billy Tauzin, R-La., last week.
“We recognize that consumers are growing restless,” Mr. Johnson said in an interview. “Frankly, we’re not going to take one for the cable companies.”
Mr. Johnson’s comments came in response to complaints by activist groups that cable companies have been hiking rates by up to 10 percent this year.
That’s on top of the industry’s 45 percent increase in rates over the past six years-nearly three times the rate of inflation.
As a result, watchdog groups are urging Congress to crack down with legislation that would either reregulate cable rates or force operators to break up programming tiers to allow consumers to buy customized a la carte packages that include only the networks they want to pay for.
Mr. Johnson said a better remedy would be to “level the playing field” for cable’s competition. But whatever the cure, the rate hikes are getting the attention of key lawmakers.
“At some point it’s got to come to an end or there will be a consumer revolt on Capitol Hill,” Mr. Johnson said.
“We continue to be concerned about rising cable rates.”
Mr. Johnson’s views are important to the industry because Rep. Tauzin chairs the congressional committee with jurisdiction over cable TV legislation. Sen. John McCain, R-Ariz., who chairs the Senate committee with cable TV industry oversight, has also expressed concern about escalating cable rates-and made clear his interest in considering a la carte program packaging as a solution.
At a press conference in Washington last week watchdog group representatives said revenues from advertising, digital cable and other new services are enough to cover the expense of cable system upgrades and programming costs.
The cable TV industry has long asserted that the rate hikes are forced by increased programming costs and the expense of system upgrades.
“This is truly a fraud on the American consumer,” said Gene Kimmelman, director of the Washington office of Consumers Union.
“It’s a fairy tale,” added Mark Cooper, research director of the Consumer Federation of America.
In addition, Mr. Johnson said the House Energy and Commerce Committee is planning to introduce legislation to ease the transition to digital TV this year. Also high on the committee’s agenda, he said, will be consideration of ways to promote broadband competition.