Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, February 12, 1992 TAG: 9202120343
SECTION: EDITORIAL PAGE: A11 EDITION: METRO
SOURCE: By JEAN ANN FOX
DATELINE: LENGTH: Medium
MONOPOLIES
THE CABLE television industry enjoys a unique position in American business: It is an unregulated monopoly. Unlike existing utility monopolies - such as electric, gas and phone service - most cable television stations are free from competition and free to set their own rates because they are not subject to government regulation.It hasn't always been this way. The cable television industry was deregulated five years ago. Since then, the cable television industry has earned record profits. In the first four years following deregulation, cable rates increased an average of 56 percent across the country.
Competition helps keep rates down, but the majority of cable television stations function in non-competitive markets. In areas where cable is subject to even the slightest competitive pressures, basic rates are more than $3 per month lower than in communities with one unregulated cable system.
Steps must be taken to protect consumers from unfair practices in the cable television industry. The U.S. Senate recently approved the Cable Television Consumer Protection Act, a pro-consumer bill that would cap cable TV rates and revise the rules that favor cable television over traditional over-the-air broadcasting. It now goes to the House of Representatives.
This much-needed bill will put an end to escalating rates by giving the Federal Communications Commission the ability to control basic cable rates for areas without effective competition. The Consumer Federation of America estimates the legislation could drive cable rates down by about $6 billion a year by eliminating monopolistic pricing.
The $18-billion cable industry doesn't seem to feel threatened by the prospect of congressional action. Despite the prospect of regulation, the cable companies have continued to raise their rates. According to the Department of Commerce, cable rates jumped 9.7 percent last year - an amount equal to three times the rate of inflation.
Just last month, Cox Cable in Roanoke imposed a 9 percent rate increase for limited basic and a 9 percent increase for expanded basic cable service.
All across Virginia cable rates have risen faster than inflation. Customers of Media General Cable in Fairfax pay rates 128 percent higher than before deregulation. Consumers of Lynchburg Cablevision pay 122 percent more than they did in 1986. Richmond subscribers now pay about $18.43 for expanded cable TV service, compared with just $9.50 in 1986. That 94 percent increase is more than four times the rate of inflation.
Cable television's unchecked power has also limited the quality of programming available to viewers who cannot afford or do not get cable. As cable stations have taken a larger share of the TV industry's overall revenue, they have begun to outbid broadcasters for exclusive rights to television programs that all consumers are accustomed to watching on free television.
The Cable Television Consumer Protection Act is one of the most important consumer protection bills to come before Congress this year. It will help restore balance to an industry that has taken advantage of viewers in Virginia and across the country. Senate Bill 12 will give public officials the authority to cap cable rates in localities where no competition exists.
Virginia's U.S. representatives can promote effective competition and help stop the monopolistic practices of cable operators by voting in favor of the Cable Television Consumer Protection Act.
Virginia television viewers need their help.