Hill's cable inquiry finds a buzz along party lines

September 29, 1993|By David Zurawik | David Zurawik,Television Critic

Day One of a congressional inquiry into why cable rates increased instead of decreased under the Cable TV Act of 1992 provided much finger-pointing, but not many answers for consumers.

Republicans said Democrats had drafted and passed a flawed law over President Bush's veto last October. One GOP lawmaker, Joe L. Barton of Texas, said yesterday that he would introduce a bill to repeal last year's Cable TV Act.

Democrats, meanwhile, defended themselves by saying the Federal Communications Commission had erred in implementing what was otherwise a fine law.

"Where are the rate rollbacks that consumers were promised?" Rep. W. J. "Billy" Tauzin, D-La., asked of James Quello, the FCC's acting chief and the first witness called yesterday before the House Subcommittee on Telecommunications and Finance.

Mr. Quello maintained that it was too early to tell whether there was anything wrong with the Cable TV Act. And if it turns out that there is something wrong, he said, it can probably be fixed with a little "fine-tuning."

"If all the complaints of creative pricing and rate increases prove true, the cable industry is again open to the charge of being the monopolistic evil empire of the telecommunications world," Mr. Quello said.

"However, that contention is in the process of being either proven or dispelled. The FCC will not be placed in the position of rTC issuing the verdict first and holding the trial afterward."

Mr. Quello said the FCC is surveying the top 25 cable companies on rate adjustments that took effect Sept. 1 under the law. Only after the survey is completed in two weeks, he said, will it be possible to ascertain whether the act has failed in its goal of providing relief to subscribers.

He had been summoned by members of Congress under fire from constituents who say they already know the law is not working. Last week, Mr. Quello received a letter signed by 130 members of Congress asking him to reconsider the FCC's approach to implementation.

Most of the criticism concerns benchmark rates. The overall goal of the law had been to lower rates in monopoly situations so they would be comparable to those in the 55 markets with cable competition.

While the FCC found that rates in competitive markets were 30 percent lower than those in monopoly markets, it set new rates only 10 percent below monopoly levels.

"Did we set the benchmarks too high?" Mr. Quello said in response to a question from Rep. Edward J. Markey, D-Mass. "That's something the survey will tell us. And then we can proceed from there."

Up to 40 percent of the nation's 58,000 cable subscribers have seen bills increase since the law took effect. In the Baltimore area, bills arehigher for 30 percent to 40 percent of the 265,000 subscribers. Area cable operators say they have been flooded with complaints.

Especially outraging many consumers is that those using the least expensive service -- called basic -- have wound up with the greatest increases in their monthly bills.

But Mr. Quello dismissed news accounts of rate increases and higher bills as "confusing," and told subcommittee members that they were hearing only from a disgruntled minority of subscribers, not the thousands who are happy with the law. "It is a matter of human nature that Congress and the FCC will hear mostly from the vociferous minority whose rates have gone up," Mr. Quello said.

He said the complaints are coming only from those who subscribe to basic service -- about 6 percent of all cable subscribers.

But Mr. Markey told Mr. Quello sternly, "If cable operators have instituted rate increases that are not justified by costs, the FCC must eliminate these kinds of abuses."

As subcommittee chairman, Mr. Markey was at the center of yesterday's hearing. But he also had been one of the architects of the Cable TV Act, and is now taking much of the heat for its initial results.

Even so, Mr. Markey's treatment of the FCC chief prompted Mr. Barton, the Texas Republican, to describe it as "user friendly." Republicans on the subcommittee charged that Mr. Markey was going easy on Mr. Quello in return for his continuing defense of the law and testimony that it ultimately would deliver the consumer relief that Mr. Markey and others had promised last year.

"The real culprits in this mess are the proponents of this ill-conceived legislation," declared Rep. Michael G. Oxley, R-Ohio, pointing to Mr. Markey.

"Last year, a great many in Congress decided to play Santa Claus for all cable subscribers," said Rep. Thomas J. Bliley Jr., R-Va., looking at the chairman. "But . . . instead of shiny lower rates, some cable subscribers got a lump of coal."

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