FCC Reins in Cable TV Rates Move Could Mean One the Largest Savings for Consumers in the History of Regulation

Article excerpt

AMERICA'S cable TV customers should have an extra $3 billion jingling in their pockets after the latest action by the Federal Communications Commission.

The FCC, responding to pressure from the public and Congress, voted 3-to-0 to reduce cable television rates by an average of 7 percent. That comes atop a 10 percent cut ordered last year.

Chairman Reed Hundt claimed the FCC action would bring about one of the largest savings for consumers in the history of regulation.

The commission's action was a delicate balancing act. The nation's 57 million cable customers have endured significant price increases in recent years. But the industry insists it needs the higher rates to pay for rapid expansion and greater services.

Cable TV firms, along with telephone companies, are expected to be major players in the coming "information superhighway" enthusiastically promoted by Vice President Albert Gore Jr.

Interactive television, which could give homes and businesses ready access to vast libraries of information, will be a fundamental link in the superhighway. But installing expanded TV services requires billions of dollars in new investment.

The National Cable Television Association claims its operating companies have already lost $2 billion since the first FCC pricing regulation went into effect in September 1993.

A study by the FCC found that its first order cut the average monthly bill for cable TV from $25.61 to $24.11, a drop of 5.9 percent. Those figures do not include premium services like HBO and Showtime, which are not regulated.

While most subscribers (67.6 percent) saw prices fall, 30.5 percent sustained price increases, despite the FCC action.

The new FCC order attempts to rectify that. It closes some loopholes, such as moving desirable programming from a regulated to an unregulated package to get around price controls.

FCC staffers worked throughout the Presidents' Day weekend, finishing the new rules at 3:30 a.m. on Tuesday just hours before the commission vote.

Chairman Hundt calls the final plan "a brilliant balance" between the needs of the industry and consumers. …