Cable TV: The Re-Regulation, Re-Wiring, and Re-Education of America

Article excerpt

After four years of room and board at the White House and a winning streak of thirty-five successful vetoes, it is interesting that the congressional override of President Bush's thirty-sixth veto concerned the regulation of cable television companies. This had something to do, naturally, with the opening of poll booths in November and something to do with the fact that the 102nd Congress was within a few hours of adjournment. But it also had something to do with the simple non-partisan popularity of the measure to authorize regulation of minimum cable service and seek to stimulate competition. The Senate voted 74 to 25 and the House 308 to 114 in support of the bill to restore regulation. In the Senate, twenty-four Republicans joined fifty Democrats in voting to override the presidential veto, a margin too large to ascribe to political waywardness.

Standing Square

Bush's arguments on the dangers of regulation had little impact on the legislators, causing speculation that he either disliked regulation simply on principle, or that he had small grasp of the implications of the bill. Bush said that the legislation would do little to increase competition in the cable television industry, would cost American jobs, and would discourage investment in telecommunications. He also objected to a provision in the bill that would allow television broadcasters to demand royalties from cable companies for carrying their programs.

Senator Albert Gore (D-TN), a principal author of the bill, said: "Cable consumers are getting ripped off and George Bush is giving the cable monopolies permission to do it." He accused the President of "standing square with the big cable operators, the monopolies that have been raising rates and squeezing out competition."

Senator Joe Lieberman (D-CT) said that the cable companies were engaging in "highway robbery." In the past, he said, "the cable industry has relentlessly raised rates on the American consumer, year after year." Without protective regulation, this will only continue.

Defenders of the bill argued that costs to consumers would rise if the measure were not passed, and critics of the bill declared that its enactment would result in greater costs to users. In addition to providing regulation of rates and seeking to encourage competition, the bill also enables over-theair broadcasters to seek payment from cable companies that carry their broadcasts. The movie industry vigorously opposed the bill because there was no provision for it to share in these revenues.

Let's Not Micromanage

In September on NBC's "Meet the Press," David Broder attempted to extract some insight on the pending legislation from Vice President Dan Quayle. Broder asked Quayle a few questions help clarify the matter.

Q: Explain in simple terms why the cable companies should not be regulated.

A: O.K. Simple terms, here's the choice. Here's the choice in simple terms. Are you going to try to constrain the price increase through regulation or through genuine competition? Our preference is to do it through genuine competition.

Q: But there isn't genuine competition.

A: That's right. Because you have -- but the cities that grant these things can certainly be more competitive and have more openness if they're --

Q: So your suggestion is that they go out and have two or three different companies wire these communities to get competition?

A: I'm not going to get into the micromanagement of the cable industry.

So much for the insight of the Vice President of the United States and, I would think, so much for his much touted Council on Competitiveness.

The product of over three years of political debate, the bill actually provides for only modest rate regulation along with several provisions designed to foster greater competition in the industry. The FCC is empowered to set guidelines that would "approximate" prices levied in the few markets where cable companies actually compete with one another. …