[10308] in Commercialization & Privatization of the Internet
FCC Deliverations on Cable TV Rates
daemon@ATHENA.MIT.EDU (Internet Multicasting Service)
Fri Feb 18 05:42:22 1994
Date: Thu, 17 Feb 1994 10:29:07 -0500
To: "Com-Priv" <com-priv@psi.com>
From: "Internet Multicasting Service" <carl@radio.com>
On February 22, the Federal Communications Commission is expected
to make a ruling on the question of cable rates. Technically,
what the Commission is expected to announce is a reconsideration
of the cable rate benchmark proceedings. At the end of this
brief description of the issue, you will find directions on how
to let your voice be known on the question of cable rates.
Here is what is happening:
In 1992, Congress passed the Cable Act, which among other things
required the FCC to pass benchmark regulations meant to bring
monopoly cable rates into line with those in competitive markets.
The regulations were based on studies that showed that rates in
markets with two or more cable providers were significantly lower
than those that were in a market with a single provider. The
goal of the Cable Act was to reduce total industry revenues by
approximately $1.5 billion.
The goal seemed simple enough, but achieving that goal through
regulation turned out to be a non-trivial task. The reason is
that you can't really regulate total revenues, you have to
regulate the rates for individual services and hope that the new
portfolio of rates achieved are near the revenue target.
The FCC benchmark scheme was put into effect, but a large amount
of controversy has swirled around the regulations. On the
industry side, objections were made that the regulatory process
and the regulations are onerous and complicated. More
fundamental objections are that the cable industry will not be
able to build our information superhighway unless they have the
revenues to invest in physical plant and infrastructure.
On the opposite side, objections were made that the revenue
target of $1.5 billion was not achieved because the cable
companies had shifted their rate portfolios around in a way that
many consumers actually saw increases in their rates. It is
generally acknowledged that cable industry gross revenues came
down, but that the actual number in revenue losses is probably in
the several hundreds of millions.
After the initial benchmark regulations, the FCC has frozen cable
rates, and extended that freeze several times. A growing
movement has urged the FCC to impose a further 5-10 percent
reduction in rates. It is believed that Chairman Hundt has
proposed such a plan and is attempting to forge a consensus among
his fellow commissioners and will announce the FCC decision on
February 22.
The issue is important because it has become involved in the
Congressional deliberations over NII legislation. Part of the
current debate hinges on whether cable companies will have the
revenues necessary to carry out the grand visions embodied in
pending legislation before the House Subcommittee on
Telecommunications and Finance.
This is the kind of issue where it is important for a broad
spectrum of voices to be heard.
Here is how to get your comments to the FCC:
Chairman Reed Hundt
Telephone:+1 (202) 632-6600
Facsimile: +1 (202) 632-0163
Email:
remote-printer.Chairman_Hundt@12026320163.iddd.tpc.int
Commissioner James Quello
Telephone: +1 (202) 632-7557
Facsimile: +1 (202) 632-7173
Email:
remote-printer.Commissioner_Quello@12026327173.iddd.tpc.int
Commissioner Andrew Barrett
Telephone: +1 (202) 632-7116
Facsimile: +1 (202) 632-5168
Email:
remote-printer.Commissioner_Barrett@12026325168.iddd.tpc.int
