Competition and cable TV

April 13, 1993

The first fruits of the cable TV bill passed last year are starting to ripen. Armed with new authority, the Federal Communications Commission has decreed what the cable industry so desperately tried to stave off: a rollback of rates. It will be months before cable viewers see any impact in their monthly bills, but before the next TV season gets under way, many will be paying roughly 10 percent less for all but premium services. Local governments have to trigger the process that would force the charges down, so the timing will vary from place to place.

What won't vary is a national benchmark of "reasonable" charges. They will be based on those rare, blessed areas that have competitors wooing subscribers. Almost invariably such areas have much lower rates -- about one-third less -- than the 99 percent of the nation where monopoly reigns.

A sample of what local subscribers may expect can be found in northern Anne Arundel County, where two companies -- North Arundel Cable and Jones Intercable -- compete at rates substantially cheaper than are charged in neighboring areas. They also offer subscribers much more for their money.

Ironically, the FCC's forcing of competitive standards onto the cable TV industry comes at a time when it faces a new era of competition. Another great leap in technological change in the communications world is in the offing. The clear distinctions between cable TV and other electronic information services like telephones are starting to blur. By the end of this decade they may no longer exist.

Cable companies may offer the sort of communications we now look to telephones for, and the telephone companies may offer the sort of entertainment and information we now seek on cable TV. Properly channeled, that sort of competition can do more for the consumer than any government regulation.

In the meantime, competition must be forced on the cable TV industry. The prospect of lower rates does not seem to be inhibiting its development of vastly more sophisticated electronic switching systems and fiber cables, which expand transmission capacities almost infinitely. Rather than discouraging prospective customers with high rates, the cable people may find themselves softening up the market for the next generation of services, almost in spite of themselves.

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