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Cable rates under fire

Sub fees on Congressional table

WASHINGTON — Faced with soaring cable rate hikes, some in Congress are now saying subscriber fees should continue to be regulated into the next century even though price controls are currently scheduled to sunset in 1999.

Rep. Ed Markey (D-Mass.) announced Tuesday that he will pursue legislation that would rescind a provision of the Telecommunications Act that orders the FCC to end rate controls on March 31, 1999. Congress set the deadline in the Telecommunications Act of 1996, with the expectation that competitors to cable would quickly emerge — thus removing the need to regulate fees charged by the largely monopolistic cable industry.

Notice of the pending legislation comes just one week after Time Warner vice chairman Ted Turner warned cablers at the annual Western Cable Show that rising rates were attracting unwanted attention from Congress. In reference to soaring cable stocks, Turner said, “The greatest threat in the near term is rate reregulation.”

Markey says it is now clear that competition is not going to appear before the deadline for taking rate regulation off the books. “Since there is little likelihood that effective com-petition will materialize to provide price competition by that date for the vast majority of American households,” Markey wrote in a letter to FCC chairman Bill Kennard, “I plan to introduce legislation when Congress reconvenes next year to repeal the sunset date.”

Markey also chastised the FCC for failing to keep rates at “reasonable” levels. Since 1994, the FCC has been regulating rates based on a formula that allows operators to pass on to consumers programming and other costs. “It is becoming increasingly clear in light of recent rate hikes that these rules are exceedingly generous to monopoly cable operators,” wrote Markey.

Congress is currently on recess, so it is difficult to gauge support for Markey’s proposal. However, an aide to Markey predicted Tuesday that after hearing about rising rates directly from consumers, many in Congress will return to Washington eager to embrace the measure.

A spokesman for House Telecommunications Sub-committee chairman Billy Tauzin (R-La.) said it was too early to rescind the deadline for deregulation, but did not rule out Congressional action. Tauzin plans to introduce legislation that will foster competition to cable from telephone companies and the satellite industry. “If we are unsuccessful, it may be necessary for the FCC to continue to oversee cable rates.” The FCC is scheduled to hold a hearing on competition in the cable industry today.

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