House and Senate negotiators working on a major telecommunications bill have reached a tentative compromise on how quickly to free cable television operators from federal price controls, according to congressional sources. The deal could protect millions of cable consumers from price increases for at least three years.
Legislators, working with the cable television industry, consumer groups and the Clinton administration, have agreed to keep federal rate controls in place for large cable systems that serve about 80 percent of all cable subscribers.
Smaller cable systems, however, would get immediate relief from controls on the prices they charge for such programming as CNN, MTV, ESPN and other channels that are not considered part of a basic tier of programs. The definition of a small system would include systems serving fewer than 50,000 people and owned by companies that serve no more than 1 percent, or roughly 600,000, of total subscribers nationwide.
The administration has threatened to veto the final bill if, among other things, it deregulates the cable industry before operators face actual local competition from a phone company or another cable franchise.
But sources said the White House may support the basic outlines of the proposal because it delays deregulation for longer than the House version of the bill, which would lift all cable rate controls within 18 months of enactment. Cable operators would get relief sooner, under the House measure, if a phone company merely applied to offer competing video programming.
“I think it’s a little dangerous to call this a done deal,” said one House staffer close to the negotiations. “We’re close to closure but until people see the language they’re reluctant to say they’re happy.”
Several sticking points remain. Cable industry advocate Rep. Dan Schaefer, R-Colo., is pushing to increase the number of consumer complaints necessary to trigger a review of a cable operator’s pricing policies. Rep. Edward J. Markey, D-Mass., an opponent of rapid cable deregulation, is trying to ban cable systems from offering bulk discounts to apartment buildings or other multi-tenant cable subscribers. Fledgling competitors to cable, such as wireless cable and direct broadcast satellite companies, often begin in business by serving multi-tenant dwellings.
Congress imposed cable rate controls in 1992 to stem huge increases in cable television prices that followed deregulation of the industry in 1984.