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FCC expected to OK cable rate cuts

The Federal Communications Commission will vote today to cut cable TV rates beyond the industrywide average 10% rollbacks adopted last year.

FCC staffers were working throughout the holiday weekend to put final touches on a plan that will reduce the “benchmark” pricing levels adopted last April by at least 5%. Though the price cuts will fall short of the 6%-10% across-the-board reductions originally proposed by new FCC chairman Reed Hundt, the cable industry “will still take a good hit,” said one agency source.

Commissioner James Quello is expected to provide the second vote Hundt needs to slash cable rates further. It was unclear whether commissioner Andrew Barrett would support the Hundt-Quello plan. FCC sources said that as late as Friday, Barrett supported only a minor “tweaking” of the benchmark cable rates and was considering dissenting from today’s vote.

Small cabler relief

Small, independently owned cable systems will likely get relief from the revised FCC cable rate rules, according to sources. The FCC may also adopt a plan allowing the agency to regulate cable rates on behalf of cities that fail to file the proper “certification” paperwork, sources said.

There was a possibility the FCC will adopt new rules targeting cable systems deemed to have evaded last year’s rate regs by switching to extensive “a la carte” programming lineups, sources said.

For Hundt, the cable vote will likely signal an abrupt end to his brief honeymoon.

That’s because there’s every indication today’s vote will provoke anger from all sides of a debate that has taken on the trappings of an ugly political campaign.

Liberals in Congress, led by House telecommunications subcommittee chairman Ed Markey (D-Mass.), have joined consumer groups in recent weeks imploring the FCC to drastically roll back cable rates an additional 20%.

Meanwhile, the cable industry has engineered a massive lobbying campaign claiming that further rollbacks in rates will jeopardize cable’s chance to compete with the Baby Bells in creating the much-ballyhooed “information superhighway.”

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