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Star Fresno City Hall Series Star
January 14, 1997

Media One Cable Rates Rising
More Government Proposed

By Marc Stone, Daily Republican Staff Writer

FRESNO DESK - The Fresno and Los Angeles cable television company, Media One, is the subject of increasing numbers of complaints about rate increases. The complaints may stem from Media One's Cable service monopoly given to it by the Fresno City Council. Media One's exclusive franchise for the area eliminates the competitive market place pricing. Without the monoply grated by City Hall, Cable rates might be one-third as much.

Media One could not be reached for comment.

In a disclosure certain to provoke calls for stiffer regulation of the nation's cable television operators, the Federal Communications Commission on Tuesday issued a report showing that cable TV rates have been rising nearly four times faster than inflation.

FCC chairman William E. Kennard told reporters Tuesday 'Rates are rising, [and] they're rising fast...the competition Congress envisioned when it phased out regulation of cable rates is not here and is not imminent.'

Cable rates jumped nearly 9% in the past year generating an additional $1.5 billion in revenue for cable providers. The Consumer Price Index rose only 2.2% during the same period.

Consumers Union, a Washington watchdog group, told the Fresno Daily Republican that some of California's 6.5 million cable subscribers are experiencing double-digit price increases this year.

The FCC disclosures are likely to set-off a public reaction similar to the one that pushed Congress in 1992 to override a presidential veto and pass sweeping legislation reforming regulation of the $30-billion-a-year cable industry.

But critics point out that many of the nation's largest cable companies, including Time Warner and Tele-Communications Inc. (TCI) own the companies that supply some of their own programming. The FCC report, for instance, found that eight of the 15 most popular cable channels are owned by cable system operators.

Meanwhile, the growth of competitive services has been slower than expected. Direct broadcast satellite companies, including the DirecTV unit of Hughes Electronics, have signed up nearly 2 million customers, for example, but Americans remain thoroughly dependent for much of their entertainment programming on cable, now claiming 71.6 million subscribers.

The Cable industry will likely fight any efforts to stiffen or enhance current regulations. The FCC proposed, earlier this year, that Congress change copyright laws to permit satellite companies to carry local television stations so they can compete with cable providers. The agency also is considering asking congress for permission to allow bundling of premium channels by cable operators.

The long list of intrusive regulatory steps suggested by the FCC would most probably result only in more expansive government mis-management.

Congress tried most recently to break cable's grip on home viewership two years ago when it passed the sweeping Telecommunications Act of 1996. That law was directed at encouraging competition in the cable industry by permitting telephone companies, satellite services, and others to compete in offering subscription video services.

The law empowered the FCC to regulate cable rates until March 31, 1999, by that time lawmakers hoped sufficient competition would have developed to keep cable prices in check.

Making a deplorable situation even worse, Oregon representative Peter A. DeFazio(D) has introduced a bill in the House to impose government price-controls on cable rates.

Copyright 1998 The Fresno Daily Republican Newspaper

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