When it comes to cable television, Americans are hopelessly hooked. But in the face of soaring prices and instances of lousy service and uneven programming, even cable addicts are fed up.
Congress has heard the complaints and is working on new legislation to reimpose strict controls on cable pricing, less than four years after cable industry deregulation led to explosive growth. Cable subscriptions from 1985 to 1990 skyrocketed from 32 million to 53 million households.Not even the doubling or, in some cases, the tripling of prices deterred millions of households from signing up for cable. Americans simply enjoy being able to zap from channel to channel, "grazing" among the dozens of cable services.
But critics in Congress and consumer advocates say cable operators have gone too far in boosting prices. They also accuse the industry of too often providing shoddy service - not answering the phone, for example - and programming that fails to reflect the industry's huge revenue growth, up 21 percent to $26.36 per subscriber from late 1986 to 1990.
According to a General Accounting Office survey released in June, the average cable subscriber's monthly rate for the lowest priced basic service increased 43 percent to $15.95 from Nov. 30, 1986, to Dec. 31, 1989, including a 10 percent increase in 1989. During that time, the number of basic channels available to subscribers increased on average from 24 to 31 channels.
It now appears likely that the government will act this year.
"Everybody recognizes that Congress or the Federal Communications Commission will alter the way cable is regulated," said John Wolf, vice president of the National Cable Television Association, a leader in the fight against re-regulation.
Unlike Congress, the FCC strongly opposes the idea of imposing new rate regulation on basic cable-television services, hoping to persuade lawmakers instead to adopt a free-market solution.
"We call for opening local cable markets to competition," said FCC Chairman Alfred Sikes in remarks Friday at the National Press Club. Competition could be provided eventually by second cable systems, direct broadcast satellite and telephone companies that wire homes with fiber optics technology.
But none of those alternatives can be expected to be major factors soon. Wiring homes on a second service is an expensive and time-consuming prospect. DBS, allowing consumers to pull in satellite signals with small dishes, is still several years away. And telephone companies could be up to two decades away from rewiring the country to provide video services.
"From a consumer perspective, our preference is not to pin our pocketbook on these hopes and promises but to re-impose regulation to bring rates down until competition actually develops," said Gene Kimmelman, legislative director of the Consumer Federation of America.
Kimmelman said the 1984 cable law that launched deregulation also promised increased competition, but, "We've learned fom bad experiences ... that we're better off hedging our bets and controlling cable rates."
While acknowledging that cable rates "in some areas have gone up too far too fast," Wolf worried that Congress, in its zeal to re-regulate because of abuses by relatively few operators, could "cripple the entire cable industry."
Added Wolf: "We think it's important for people to focus on the actual price they pay and the service they receive. When you stack up cable television against any other medium, it's an extremely good buy."
The cable operators are opposed to a re-regulation bill that passed, without dissent, the House Commerce and Energy Committee Thursday. The legislation calls for the FCC to set a top fee that cable companies can charge for a basic cable service of local broadcast, public education and government channels.
The bill would empower the FCC to halt price gouging if cable operators charge unreasonable prices for other cable channels, such as ESPN, Cable News Network and other Turner Broadcast Systems cable channels.
Similar legislation is under debate in the Senate.
House Energy and Commerce Chairman John Dingell, D-Mich., "is optimistic and expects a (re-regulation) bill to be passed this session," said spokesman Dennis Fitzgibbons.
Both the House bill and FCC recommendations would ensure that potential cable competitors have fair access to cable programming, especially when cable operators hold an equity interest in cable programming.