SENATE APPROVES CABLE TV BILL THAT RESTORES LOCAL REGULATION

A bill that will restore to local governments some regulation over basic cable television service passed the U.S. Senate last week by a vote of 73-18.

Called the Cable Television Consumer Protection Act, the Senate bill prevailed over a more moderate substitute bill.

Sen. John Danforth, (R-Mo.), sponsored the bill. He said the measure will promote competition in the industry and protect consumers.

"I believe the Senate's decisive vote rises from the public's anger over high rates and poor service," he said. "The Consumer Federation of America described this bill as the most important piece of consumer legislation of the year.

But Roger Harms, manager of TCI Cablevision of Missouri's Cape Girardeau and Jackson offices, said the Senate measure is a "bad bill" that will only restrict development of new cable TV technology.

"I think it's a catch-all bill," he said. "I don't agree with it, and I think it's going to eventually hurt the industry because it will curtail technology."

A substitute bill, called by its proponents a more "reasonable alternative," was defeated by the Senate.

Harms said new technology in the cable TV industry is "out there waiting to be developed." But he said it takes money to research and come up with better products, service and equipment.

"If you're going to cut the faucet off, you won't be able to develop it, and some other foreign company that's not regulated will," he said.

"What a lot of people don't understand is the money we charge the customer, part of that goes to new technology."

Danforth said the primary goals of the legislation are to encourage competition and protect the consumer.

He said the bill restores public authority over cable rates in areas with a cable monopoly; opens up programming services to broader distribution; requires that minimum customer service technical standards be set; and requires that all local broadcast channels be carried on local cable systems.

Cape Girardeau City Attorney Warren Wells said he welcomes any reregulation of the cable TV industry, which, he said, now is an unregulated monopoly.

"Any help in that area is going to be a step in the right direction," he said. "It's just that one of the concerns is that it probably hasn't gone far enough to protect against monopolism.

"But it's going to provide some improvement and some ability for local governments to have some impact on local cable systems, and we welcome that."

Wells is the city staff's liaison with the Cable TV Citizens Committee, which was formed to study the city's franchise agreement with TCI and make recommendations to the city council concerning a new franchise.

Key provisions of the bill include:

Rate regulation: Rate regulation is permitted only in the absence of effective competition. Effective competition exists in a community where residents have access to local broadcast programming and to a competing cable provider such as a cable operator or a microwave or satellite system.

Access to programming and programming distribution: National and regional programmers are barred from unreasonably refusing to deal with distributors. They also are barred form discriminating in the price, terms and conditions if that action would impede retail competition.

Must carry, channel positioning and retransmission rights: The bill requires carriage of local broadcasters and limits the discretion of cable systems to shift channel positions. It requires cable systems to devote up to one-third of their capacity to broadcast stations. One year after enactment, broadcasters would have the right to negotiate for compensation from cable operators who wish to retransmit broadcast signals.

Harms said he was particularly unhappy with the "must carry" provision in the bill, which requires cable systems to obtain retransmission consent from broadcast stations. He said the provision was added in response to intense lobbying from television stations.

"What that means is we have to negotiate to carry their signals," he said.

Harms said broadcast stations would be able to opt for "must carry," which would force the cable system to carry the signal, or "must pay."

"If it's a strong station, like KFVS, they can opt for `must pay' because we're going to broadcast their signal regardless, and so we'll have to pay to carry their signal," he said.

"Then you've got a low power station like ACT-45, and we'll have to carry them too."

Under the 1984 Cable Act, cable systems were exempt from local price regulation beginning in 1987 if they were found to have "effective competition" as determined by the FCC. In the 1984 act, the FCC defined effective competition as three broadcast stations in a cable system's market.

The Senate bill passed last week allows municipalities to regulate the basic "tier" of cable TV programming when there is no effective competition now defined as six or more over-the-air signals.

Also, if fewer than 30 percent of subscribers take only the basic tier, then the FCC can regulate the next tier, to which 30 percent subscribe.

Harms said the percentage of subscribers who have only the basic tier of service in Cape Girardeau is well below 30 percent. He said regulation of upper tiers of service will only hurt cable service.

"Nobody likes regulation," he said. "It creates red tape and added expense. When there's regulation, all it ends up doing is you have to increase your costs and pass it on to your customers.

"But then you have rate regulation, so you end up cutting back on your service.

"I have yet to see anything that Washington's done in terms of regulation that they haven't screwed up."

Harms said he doubts the bill will make it through the House. If the same Senate bill is approved by Congress, he said, Bush has promised a veto.

"If they'd water that bill down then I could buy part of it," he said.