
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SUNDAY, August 29, 1993                   TAG: 9308290061
SECTION: NATIONAL/INTERNATIONAL                    PAGE: C-3   EDITION: METRO 
SOURCE: Los Angeles Times
DATELINE:                                 LENGTH: Medium

NEW CABLE TV RATES MAY PROMPT CONGRESS TO ACT

Despite early promises to the contrary, as many as one-third of the nation's 57 million cable television households face price increases when the new federal regulations designed to put the lid on rates take effect Wednesday.

The rate increases, mostly in the range of $1 to $3 a month, will fall hardest on basic-service-only subscribers, whose bills are already relatively low, and on customers receiving several premium entertainment channels, such as the popular HBO, Disney and Cinemax.

If a consumer outcry arises over the new bills, it could prompt Congress to make a second try at regulating cable rates. Some lawmakers say they are ready to step in if necessary.

"When we said that two-thirds or three-quarters of cable subscribers would get rate decreases, we never imagined that the rest would get an increase," said Rep. Edward Markey, D-Mass., an author of the new cable-rate law. "We're looking at it hard, and we will demand answers from the industry."

Overall, government authorities and cable companies are sticking by their original prediction that two-thirds of consumers nationally will save a total of $1 billion per year on their cable bills. Most of these subscribers are expected to get a rate cut of about 10 percent.

But the rate cuts fostered by Congress and federal regulators over the past year will flow mainly to families now spending large sums for multiple cable connections and extra equipment, and could range as high as $15 to $20 per month.

"We know consumers will be upset, but we're only following the law," insisted Dale Bennett, vice president of California operations for Tele-Communications Inc., the nation's largest cable owner. "It just didn't work out as everyone anticipated it would."

But James Quello, interim chairman of the Federal Communications Commission, accused the cable industry of publicizing the minority of cases in which cable bills will rise in an effort to discredit the new federal cable law. Broadcasting & Cable, a trade journal, quoted him saying the industry should be careful: "They could tick off Congress and the FCC."

And some consumer groups say the cable companies, which vigorously fought re-regulation, are now packaging their services to circumvent the new rules.

"It's a loophole that the cable companies are using to avoid the reductions that Congress and the FCC wanted and intended to give," said Bradley Stillman, legislative counsel for the Consumer Federation in Washington

Stillman predicted subscribers would see real cuts in their cable bills only with the advent of competition from direct broadcast satellite technology in the next few years.

At the heart of the issue is a complicated set of regulations drafted by the FCC following Congress' passage last October of a law designed to halt the rapid rise in cable rates that followed the industry's deregulation in 1986.

Under the FCC regulations, cable operators are required to reduce many charges, but are permitted to increase other rates - so long as the rate increases generate less money than the required price cuts.

The FCC's new rate scheme is complicated and its formulas apply differently to each of the estimated 11,000 cable territories.

Among the subscribers likely to be hit with an increase are those now getting only the cheapest cable services, including "basic" and the next level up, often called "enhanced basic." These customers may find that their cable operator has removed programming from these categories and put it in a separate cluster for which there is an additional charge.

by CNB