House OKs cap on rates for basic cable service

September 18, 1992|By Knight-Ridder News Service

WASHINGTON -- Holding out against fierce lobbying by the cable TV industry, the House voted overwhelmingly yesterday to cap rates for basic service and set national standards for customer protection.

The 280-128 vote exceeded the two-thirds majority needed to override a threatened veto by President Bush (though it was short of the 289 votes needed if the whole House were to vote), but the bill must still clear the Senate, where the outcome is expected to be closer. A Senate vote could come next week.

Consumer advocates assert that the bill would force price cuts of up to 30 percent on a monopoly-dominated industry that has raised fees on customers at three times the rate of inflation for the past five years.

But the bill would leave it to the Federal Communications Commission (FCC) to determine reasonable rates for basic cable, and even supporters caution that expectations of dramatic price rollbacks are overblown.

"Rates are going to go up with or without this legislation," said Rep. Jim C. Slattery, D-Kan., a backer of the bill. "They will go up much less with the passage of this legislation."

Cable industry lobbying and thousands of letters from concerned consumers cut into support for the bill, resulting in 55 more "no" votes than for an earlier version the House passed in July.

Downplaying the main issue of price controls, the cable industry has focused on a requirement that cable operators get $l permission from over-the-air broadcasters before retransmitting their signals. Cable operators warn that rates would rise by $20 to $50 a year if broadcasters are allowed to demand payment for their programming.

"This bill has been bushwhacked by the broadcasters," said Rep. William J. Hughes, D-N.J., an opponent. "Broadcasters see a pot of gold at the end of the rainbow."

But Gene Kimmelman, a lobbyist for the Consumer Federation of America, called that argument "baloney."

Broadcasters want the largest audience possible for their programs and are in no position to demand exorbitant fees from cable operators, Mr. Kimmelman said. Many broadcasters would probably continue to supply their programming without charge, he said.

The fight over the bill has pitted consumers and broadcasters against cable operators and movie makers. Hollywood is upset that the bill would not grant the film industry a cut of the fees that broadcasters would be able to charge.

The furor over the bill, which is a House-Senate compromise, has obscured what it would actually do. Some of the main provisions would:

* Allow the FCC to set prices for basic cable and punish cable operators who charge too much for other options. The FCC would also have to approve service installation and equipment rental fees. Cable operators would not have to include "superstations" in their basic service.

* Require the FCC to create national standards for customer service that address cable company office hours, complaint procedures, billing and service installation.

* Forbid creators of cable programs from charging unfair prices to competitors. Supporters say this would invite competition from developing technologies; the industry counters that it would drive up costs.

Mr. Bush is strongly against the bill. "This legislation will hurt Americans by imposing a wide array of costly, burdensome and unnecessary requirements on the cable industry and the government agencies that regulate it," he said in a letter to House Republican leader Robert H. Michel of Illinois, who voted for the bill anyway.

Consumer advocates say cable firms, 95 percent of which have no effective competition, are overcharging consumers by up to $6 billion a year. They say the added costs that cable operators complain about would be far less.

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