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FCC to quit regulating expanded basic cable

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The government is getting out of the business of trying to hold down Americans' monthly cable TV bills. During the past several years, even with that regulation, rates rose sharply.

Starting March 31, the Federal Communications Commission, following the directive of a 1996 law, will stop regulating most cable TV services.Specifically, it will lift federal price controls for the expanded basic services that include many popular cable TV channels, such as Discovery, CNN, MTV and ESPN.

"Customers won't notice the difference because they have already become numb to cable price gouging from three years of meaningless regulation," contends Gene Kimmelman, co-director of the Consumers Union's Washington office.

The Clinton administration and lawmakers say they will keep a close eye on rates after the price controls are lifted.

Decker Anstrom, president of the National Cable Television Association, doesn't believe the nation's 67 million cable customers will get a price jolt.

"Our companies are very much aware that they need to act with restraint," Anstrom said. "If they don't, Congress will come back in and reinstitute rate regulation."

Congress and the Clinton administration set the March 31 date with the hope that widespread competition to cable would materialize, making price controls unnecessary. But such competition hasn't developed yet.

The most basic level of service, meanwhile, which includes mostly broadcast TV channels and a few cable networks, will continue to be regulated. So will prices for set-top boxes and remote controls.

Premium channels such as HBO and Showtime were never subject to federal price regulation.

When cable price controls took effect in 1993, after a 1992 law that regulated the industry, rates initially did go down, saving customers billions of dollars.

But near the end of 1994, the FCC under political pressure revised the rules, giving cable companies much more leeway to increase rates to account for increases in various business costs, such as programming.

By the summer of 1996 cable rates were spiking up.

Between 1996 and 1997, cable TV rates rose 8.5 percent, according to FCC figures. And, cable rates went up about 8 percent for the year ending March 31, 1998.