FCC control of cable rates to end

While local cable television rates will increase next week, don't blame it on the end of Federal Communications Commission price controls.

Cox Communications of Las Vegas will implement on Monday a 5.1 percent rate increase that was announced in December.

The increase will result in most customers seeing their rates go up by about 53 cents a month, from $9.70 to $10.23 for basic service, Channels 2-17; or $27.51 to $28.04 for the "preferred" package of Channels 1-49.

Basic stations include the major network affiliates, two Spanish networks, government access and superstations from Chicago and Atlanta. The preferred package offers stations like CNN, ESPN, USA, the Family Channel, Nickelodeon and the Disney Channel.

But the increase isn't linked to the deregulation of the cable industry due to occur at the end of next month.

The FCC's existing price controls on cable television end on March 31 under a 1996 telecommunications law. Only the price of the most basic level of cable service will continue to be regulated.

"We will let it set as of March 31," Commerce Secretary William Daley told reporters in the "sunsetting" briefing on the law enacted three years ago.

"We're pleased that the administration supports the scheduled sunset of cable price regulation," said National Cable Television Association President Decker Anstrom.

The cable industry opposes regulating prices beyond March 31, saying it would halt investment in new services -- such as high-speed Internet access and digital TV -- and discourage companies from adding new channels.

But consumer groups were disappointed by Daley's comments.

"The administration is doing nothing to challenge skyrocketing prices charged by cable monopolists," said Gene Kimmelman, co-director of the Consumers Union's Washington office.

Daley said the Clinton administration will keep a close eye on cable rates after the price controls are lifted. "We will watch it. We will not let anyone take advantage ... and gouge consumers," he said.

Cable prices have increased 21 percent since the law's enactment, while overall inflation has risen 6 percent during the same period, consumer groups say.

The industry says that with each rate increase, customers have gotten more channels, improved service and better picture and sound quality.

Congress set the expiration date with the hope that competition for cable would materialize and make continued price regulation unnecessary.

But consumer groups don't believe that sufficient competition for cable has developed to keep rates in check and have asked Congress to stop the scheduled deregulation. Their efforts haven't gained momentum on Capitol Hill.

The Cox system in Las Vegas is an example of a cable company investing in its system to provide better service, a company spokesman says.

"Responsible companies like ours have responded in a pro-community way," said Steve Schorr, a Cox Las Vegas vice president. "We've made investments in the community in capital projects, like our $85 million upgrade that will provide the first digital television in Southern Nevada this summer."

At the same time, Schorr said, the company has been responsible in its rate increases. The increase that takes effect next week is the smallest one the company has had in 10 years, he said.

Satellite providers are a major competitor in the market, Schorr said, and the rate hikes will allow Cox to provide products that will keep it competitive as well as keep the company on its toes in customer service areas.

Schorr said Cox supports the sunsetting of FCC oversight and noted that local franchise agreements with Clark County and local municipalities offer an adequate check-and-balance system of government regulation over the cable operator.

The Associated Press contributed to this report.

archive