Consumer org urges FCC to cut cable rates by 20%

The Consumer Federation of America is urging the FCC to roll back cable TV rates an extra 20% and crack down on cablers who evaded rate regulation by retiering service and emphasizing a la carte offerings.

The Federal Communications Commission will vote Tuesday whether to roll back cable benchmark prices more than the 10% adopted in April 1992.

There is widespread speculation the FCC will reduce cable rates at least 5% more and curb excessive a la carte programming pricing.

The letter from Brad Stillman, legislative counsel for the consumer org, to the FCC served as an attempt to refute a missive last week to the commission from House Republicans, who urged FCC chairman Reed Hundt to back off on further cable rate cuts. GOP members claimed that cable will be unable to compete with phone companies in delivering information superhighway benefits to consumers if the FCC mandates further rate cuts.

Stillman said the FCC should “keep in mind that (House Republicans) voted against the Cable Law and have every interest in thwarting its effective implementation.” Furthermore, Stillman argued, “Building the superhighway through (cable’s) abuse of market power will be ruinous.”

He claims cable operators have “performed quite well” under cable rereg, with aggregate stock prices of 12 typical multisystem operators up 63% since end of ‘ 91.

The Consumer Federation recommended further rate cuts of 20% to “bring rates down to competitive market levels as Congress clearly intended.” The consumer group asked the FCC to close loopholes and prosecute cablers who switch to a la carte programming and engaged in negative option billing to evade rate regulation.

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