The cost of watching TV

Deregulation: Cable can keep government away, keep customers happy by providing good value.

April 03, 1999

CABLE TELEVISION operators now have more freedom to set prices for most services, but Congress should watch the industry closely to make sure prices do not rise to unreasonable levels.

Some consumers may wonder whether regulation of most cable services really kept down costs -- cable prices have risen four times faster than inflation with regulation, partly because companies have been able to pass capital costs on to subscribers.

Now with deregulation, it seems that cable companies have been unleashed to jack up monthly cable bills even higher. But Congress would have to consider imposing new regulations if cable companies, essentially utilities, abuse this new-found freedom.

Cable has another reason to keep prices in check: competition. Although the industry does not face the kind of battle for business that Congress envisioned when it passed the Telecommunications Act of 1996, satellite television gives consumers an alternative.

Prices have risen, but cable companies are quick to point out that viewers of so-called "extended basic" service have access to far more channels than they did just a few years ago. Consumers may not have expected a decade ago that they would pay $45 a month for cable service, but most did not imagine they would be able to choose from 80 channels.

Don't expect deregulation to drive down cable prices as it did for long distance telephone service. But cable companies should use their new freedom to build loyalty among customers by giving them more value and more choices while giving government no reason to step back into the picture.

Pub Date: 4/03/99

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