Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!news.media.mit.edu!americast.com!americast.com!usa-post Newsgroups: usa-today.bonus,americast.usa-today.bonus From: usa-post@AmeriCast.Com Organization: American Cybercasting Approved: usa-post@AmeriCast.com Subject: bonus Thu, Sep 17 1992 Date: Thu, 17 Sep 92 04:53:17 EDT Message-ID: 09-17 0000 BONUS: Cable bill might not drop rates USA TODAY Update Sept. 17, 1992 Source: USA TODAY:Gannett National Information Network If you're the spiteful type, you might like the cable-TV bill now before Congress. It's a sharp stick in the eye for the nation's cable operators, whose customers seem to remember every rate increase, billing hassle, unanswered phone, botched service call and channel shuffle. If all you want is a break from higher cable rates, well ... you'd probably like lower taxes, too, but how often does that happen? WHERE IS THE CABLE BILL NOW? The House Thursday is expected to pass the bill by a wide margin. The Senate probably will do the same early next week. The bill's backers hope that both houses of Congress give the legislation the two-thirds margins needed to override a threatened veto by President Bush. WHAT IS THE BASIS FOR THE BILL? Supporters of the effort to re-regulate cable hail the bill as protection for consumers, who spent $18.2 billion on cable TV last year - more than they spent at the movies ($4.5 billion) and on videos ($11 billion) combined. But there is more in the bill for local broadcasters and cable's potential rivals than for cable subscribers. And it's unclear whether the bill would send cable rates up or down. WHAT'S IN THE BILL FOR CONSUMERS? The Federal Communications Commission is ordered to ensure that rates for basic cable service, installation, remote controls and converter boxes are reasonable in markets where cable systems face no competition. That is virtually every market, because only about 55 of the USA's 11,070 cable systems have competition. Where competition exists, rates are an average 30% lower. WHAT WOULD LOCAL OPERATORS DO? The bill's critics say its emphasis on rates for basic cable guarantees that local operators will ignore their basic-service customers and add any new channels at higher-priced tiers so they can charge more for them. The bill also calls on the FCC to establish customer-service guidelines. Cable operators would have to meet minimum standards for service calls, outage repairs, office hours, telephone availability and billing and refund information. HOW WILL BROADCASTERS BE AFFECTED? For a decade, owners of local TV stations have watched in horror as cable TV has siphoned off 30% of their viewers and millions in advertising profits. But one of cable's big attractions remains its ability to provide customers with clearer reception of those local TV stations. Cable operators pay nothing to carry a station's signal and aren't required to get the station's permission. WHAT WOULD THE BILL GUARANTEE? Under the bill, network affiliates and strong independent stations could demand royalty payments from cable operators or refuse to allow the operators to carry their broadcast signals. Weak UHF stations - ones most cable operators would like to drop - could force cable systems to carry their signals. Cable companies argue that if they have to pay to carry stations' signals, the average cable bill will jump $23 to $51 a year. WOULD TV STATIONS BE HURT? CBS Chairman Laurence Tisch has said TV stations could wring $1 billion a year in royalties from cable operators. But that appears unlikely. Even strong TV stations have seen their audience levels eroded by the proliferation of cable channels. Their audiences would shrink further if they pulled their signals from cable operators. More likely is some kind of swap in which cable operators get to carry broadcast signals in return for giving local stations the right to sell ads or air infomercials on open cable channels. "Stations that want to play hardball are in for a rude awakening," says Gene Kimmelman of the Consumer Federation of America, a coalition of consumer groups that supports the cable bill. WHAT WOULD HAPPEN TO THE COMPETITION? The bill would force Turner Broadcasting - and other cable programmers in which cable-system operators have equity stakes - to sell their programs to non-cable rivals for 10 years. That means telephone companies, satellite broadcasters and others developing technology that competes with cable TV will have guaranteed access to CNN, TBS, ESPN and other popular cable programming. Tele-Communications and Time Warner, another huge cable operator, made large, risky investments in Turner and other companies so they could develop a steady supply of programming. They argue that they shouldn't have to share that programming with non-cable competitors who contributed nothing. HOW WILL COMPETITION BE CONTINUED? In another attempt to spur competition, the bill prohibits local governments from awarding exclusive franchises to cable companies. But that provision is basically worthless: Fewer than 1% of the USA's cable systems have cable competitors because operators believe it isn't profitable enough to build a new system where one already exists. Says Robert Lind of Southwestern University School of Law: "Cable is paying for what it did in the 1970s and early 1980s. Cable operators promised an arm and a leg to get a local franchise, then they didn't fulfill their promises." HOW DID CABLE NOT LIVE UP TO PROMISES? Back then, federal and local regulations gave cable operators the ability to establish exclusive franchises, or local monopolies, where they built their systems. Government regulations also kept cable rates artificially low. When the industry was deregulated in 1987, rate restrictions were lifted even though the monopolies were still in place. The result: cable rates are up 80% - three times inflation. WHAT STARTED TALK OF NEW REGULATION? Higher rates, combined with the industry's poor reputation for customer service, have had lawmakers talking about new regulation for three years. The bill has triggered massive lobbying efforts by both the cable industry and broadcasters, both of whom want the support of the USA's 56.5 million cable subscribers. HOW HAVE CABLE OPERATORS RESPONDED? Cable networks have donated commercial time so the industry's "Stop the cable bill" ads can air. Cable operators stuffed an estimated 37 million monthly billing notices with cards that warned customers of rate increases should the bill pass. The National Cable Television Association has ... urged consumers to send telegrams to members of their congressional delegation via an an NCTA toll-free telephone number, but the cable group refuses to say how many consumers have called to do so. WHAT IS THE RESULT OF ALL THIS FIGHTING? The National Association of Broadcasters, the bill's biggest backer, sparked its own controversy. It asked its members to air news stories about the cable legislation. It's reminiscent of those Australian Rules football games ESPN used to air: Lots of mud, plenty of cheap shots and almost no way to tell what's going on. Bonus Editor: Kate Coughlin. (1-919-855-3491) Making copies of USA TODAY Update (Copyright, 1992) for further distribution violates federal law. This article is copyright 1992 Gannett News Service. Redistribution to other sites is not permitted except by arrangement with American Cybercasting Corporation. For more information, send-email to usa@AmeriCast.COM