WIRED: CABLE BILL WILL BENEFIT CUSTOMERS

Consumers who are captive to cable television monopolies will have new protection from abuse under legislation passed by Congress.

Deprived of unchecked power to gouge their customers, cable companies also face the real prospect of competition under the bill. For an industry with cable's record of high prices and poor service, competing for customers has to be a chilling idea.

As the principal author of the cable bill, I welcomed the strong Senate vote for this much-needed legislation. The margin of 74 to 25 exceeded my expectations, given the blitz of fear advertising loosed by the cable industry.

With the legislation on the President's desk, there remains the possibility that the bill will be vetoed, and the veto sustained. It is my hope that the President will reconsider his position and decide not to veto the cable legislation.

In its shameless campaign to frighten people, the cable industry said the bill would raise rates by billions of dollars. Nonsense. The bill will rein in rate hikes through competition and oversight of rates in monopoly markets. The cable ads said the bill would strangle the industry with red tape. Nonsense. If anything, the Senate version, which I preferred, was pared back too much in the final conference with the House.

Cable's ad campaign arose from the industry's natural desire to hang onto monopoly profits. Since when has jacking up monthly bills bothered cable companies? Cable's true problems with this legislation have nothing to do with the welfare of the public. The industry fears pressure on its profitability and it fears competition from new multichannel video services.

Here are the principal provisions of the cable bill:

Rates. Cable rates have skyrocketed at a pace nearly three times the rate of inflation in the past five years. Monopoly power is the principal reason for high rates; despite the Administration's opposition to the bill, the Department of Justice identified monopoly market power as the cause of approximately one-half of the increases in rates. Under the cable bill, the Federal Communications Commission will set standards for basic rates in monopoly markets; basic service is the programming level that carries local broadcast stations, public television, and government channels. Local communities will oversee basic rates within these guidelines. For other channels such as ESPN or CNN, communities can challenge rate hikes as unreasonable before the FCC.

Competition. To promote real competition, cable programmers who own local systems ("vertically integrated" companies such as Time Warner) cannot use exclusive distribution rights to deny programming to potential competitors such as microwave distributors and direct broadcast satellites. Under the bill, programming must be available on reasonable business terms to all potential distributors.

Customer service. The FCC will establish minimum standards for customer service on such matters as cable outages and billing problems. Local communities may enforce standards tougher than those set by the FCC. The FCC also will establish new technical standards for the quality of reception.

`Must Carry' or Retransmission Consent. Local broadcast stations now must provide their programming at no charge to cable systems. Under the bill, a local station may choose between running on the cable system in the proper channel slot or attempting to negotiate with the cable company for commercial rights to use its signal. The FCC is to take actions to prevent an adverse effect on rates when negotiations occur.

Customer choice. Cable companies have ten years in which to permit all subscribers to order premium and pay-per-view channels without having to buy an entire package of higher-priced channels.

The cable bill is based on sound economic principles: that competition is the best way to assure quality service at the best possible price; and that unregulated monopolies have no right to run roughshod over the public.