Federal cable television regulation will end March 31, and Utah cable subscribers will see a rate hike from Tele-Communications Inc. in June.
But the two events are unrelated and competition will now be the consumer's hedge against excessive inflation in cable prices, said Steve Proper, TCI's franchising director.Local price regulation will continue for basic cable services, which includes the pricing of hardware-like set-top cable boxes and subscription rates for basic programming.
Proper said 90 percent of TCI's customers also subscribe to programming on the expanded basic tier. Consumers unhappy with increases for expanded services have been able to file complaints with the Federal Communications Commission, a process that will end Wednesday.
Along the Wasatch Front, "The FCC hasn't stepped in because there haven't been any complaints for a number of years," Proper said.
TCI rate increases that will hit Utah customers June 1 will range from 3.4 percent to 4.8 percent, depending on the expanded programming options they buy. Subscribers seeing the higher increase likely subscribe to a full dose of sports programming.
TCI customers saw similar increases, ranging from 3.5 percent to 5 percent, one year ago, Proper said.
Cable providers are seeing more competition from satellite providers, but the costs to switch from one to another and an ongoing dispute over local programming from satellite providers has observers concerned competition isn't yet ripe enough to keep cable rates competitive.
"The chairman of the commission, Bill Kennard, has expressed concern rates would shoot up after April 1," said FCC cable services bureau spokesman Morgan Broman.
About 10 million people have satellite television service. "That's good, but the commission thinks a number of choices would be better," Broman said, including head-to-head cable competition and more satellite choices. "That type of full-blown competition is just not there yet."
Congress first tasked the FCC with cable regulation in 1992. "That gave us the right to ensure the rates would be reasonable on the basic cable tier," Broman said. The FCC received rate complaints from 15,000 cable customers between 1993 and 1996.
Regulation changed with the Telecommunications Act of 1996, which required complaints to be routed through local authorities. Even then, with duplicate complaints about a given cable provider consolidated locally, "We've handled about 1,000 complaints," Broman said.
FCC rulings on the complaints have resulted in $100 million in refunds to customers and rate roll-backs across the nation averaging 17 percent, Broman said. Without that FCC intervention, "People would have paid $3 billion to $5 billion more in cable fees since 1994, so there was a definite savings from the regulation we did."
But the 1996 law also put the March 31 sunset date on the FCC's authority to regulate prices.
"There has been talk of getting rid of the sunset and some talk of revising the way we regulate cable," Broman said. "Congress always reserves the right to write a new bill."