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Eric Glick
As the FCC drew the final curtain on upper tier rate regulation last week, public officials issued a final warning to cable operators to keep rates in line.
The warnings came from the commission in the form of a "cable consumer bill of rights campaign ... to let consumers know (that) they still have a number of rights regarding their cable service."
Meantime, a federal lawmaker sent his shot across the bow. U.S. Rep. Billy Tauzin (R-La.), chairman of the House Telecommunications Subcommittee, sent a "non-nonsense message" of his own: "I will be watching you (the cable industry) very closely in the months ahead."
The industry, meantime, reacted to the FCC's March 31 press release as little more than a publicity move the commission whipped up to answer the onslaught of phone calls, e-mails and other missives it's received over its disappearing rate authority.
One cable attorney who requested anonymity said the bill of rights "provides the public ... with (an idea) of what they're entitled to expect" from cable companies across the U.S.
But the attorney also said he "didn't think it was necessary (for the FCC) to say anything about the sunset (of rate regulation). There was nothing (in the telecom act) that said the commission had to explain it."
The bill of rights lays out three separate areas where consumers can seek help if rates begin rising too high for their liking: their local cable companies, local governments and the FCC itself, to a limited degree.
For example, the document states that subscribers "should expect a fair deal" from their operator. Subscribers should also demand an explanation from their cable operators whenever rates go up, the FCC said, especially when MSOs blame increases on programming costs. Finally, consumers should write or call their local cable operators with complaints, "and they should expect a speedy response."
The commission also reminded subscribers that they're still entitled to file grievances over basic tier rates with local franchise authorities.
What's more, the FCC gave consumers another reminder that they can get their own inside wiring for hookups to a new provider and soon will be able to find set-top boxes on retail store shelves.
"The competition that was expected to keep consumer cable rates reasonable beyond March 31 is not here yet," FCC chairman William Kennard said in a statement.
Cable operators dispute Kennard's claim that competition isn't here yet, citing the exponential growth of the DBS industry, which enjoys a 9 million subscriber market. That's compared to about 4 million DBS subscribers in 1996, when Congress decided to allow upper tier regulation to expire.
For his part, Tauzin said the March 31 sunset didn't mark an "open season on consumers. My colleagues and I in Congress will not tolerate predatory pricing practices."
Any dramatic rate hikes, Tauzin warned, "could result in congressional intervention."
As it issued its consumer bill of rights, the FCC acted on other cable issues, confirming reports that it would indeed continue to adjudicate complaints over upper tier rates well into September. However, it will only resolve disputes over rates that had been in effect up until March 31.
Other areas the commission clarified in a March 29 order concern how it defines "effective competition," small cable operators and technical standards.
First, the commission said a cable operator could be deregulated if a local exchange carrier's video service "substantially overlaps" the cable operator's "in the same franchise area." That means a LEC has to offer "comparable service" - at least 12 channels, one a local broadcaster.
As far as small cable operators are concerned, the FCC said they must serve no more than 1% of all U.S. subscribers, but can be affiliated with another larger company as long as that company's annual gross revenues don't exceed $250,000. Larger corporations can't hold more than a 20% stake in a cable company that the FCC considers small.
In related news, the FCC proposed recently to jack up cable operators' fees for FY99 from 44 cents per subscriber to 48 cents, an increase of about 9%. Comments on the proposed fees are due April 19, with replies due April 29.
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