Government regulations are not protecting cable TV customers, whose rates are going up faster than ever, consumer groups said Tuesday. They urged federal regulators to freeze rates and come up with stronger price controls.
The Consumers Union and the Consumer Federation of America asked the Federal Communications Commission to freeze cable TV rates for one year, estimating the move would save customers $1 billion. The agency has frozen rates before.
About 80 percent of all cable customers’ rates are regulated, with consumers paying about $16 billion a year to the cable industry, the groups said.
The FCC’s rate regulations are “simply put, a sham - worthless, meaningless,” said Gene Kimmelman, co-director of the Consumers Union’s Washington office.
Cable rates are rising faster now than when they were not regulated, the groups said in a petition to the FCC. And regulated rates are going up 50 percent faster than the FCC predicted they would, the groups contend.
Decker Anstrom, president of the National Cable Television Association, countered that “price increases that cable companies have instituted in the past year or two reflect the increased costs that come from adding more channels, improving service and introducing new technologies.” He said those were “all things we know our customers want.”
It’s doubtful the existing FCC, which wrote the cable rate regulations, will rewrite them now. Pending Senate confirmation, all but one of the FCC’s five members, including Chairman Reed Hundt, could be replaced as early as October.
Lawmakers haven’t ruled out a legislative remedy to address rising cable rates, but say they first want to see if a 1996 telecommunications law can work. That law provides for deregulation of the communications industries, including phased deregulation of cable TV rates.
The goal is to increase competition and restrain prices by letting cable, local and long-distance companies into each other’s businesses.
The consumer groups and other critics say the law is fueling consolidation, not competition.
But the industry’s Anstrom said more than 10 million people now get cable TV-like services from such rivals as direct-to-home satellite TV providers, telephone-owned cable sys tems and wireless cable systems. The cable industry has roughly 67 million customers.
“We would oppose any measures that would further insert the government into the workings of the marketplace,” Anstrom said.
Rep. Billy Tauzin, R-La., of the House Commerce Committee, said the FCC should freeze cable TV rates in communities “where people are getting gouged.”