FCC Considers Ending Cable-TV Monopolies : Broadcasting: The agency will look into whether competition would improve service and help hold rates down.

Cable television may need competition at the local level, the Federal Communications Commission said Thursday in deciding to study possible changes in rules that allow just one cable system in most communities.

The commission, in a 4-0 vote, said the study of competition in the cable industry was required by “changed circumstances in the video marketplace” since Congress passed the 1984 Cable Act.

That act said there need be only one cable system in any community served by three or more broadcast stations.

That, plus local franchise agreements that would be unaffected by changes in FCC rules, has meant that most communities now have only one cable system.

The FCC noted that today’s cable systems, rather than merely retransmitting the signals of local stations, offer a wide range of programming in their lowest-cost “basic” tier of service--and that the cable companies are charging more for this service.

So many customers have subscribed to cable that it now is the primary way viewers watch television in the United States. Consumer-interest groups and critics in Congress worry about cable’s increasing power in the marketplace, while customers increasingly complain of high prices and poor service.

Thursday’s action was the second major cable reregulatory initiative the FCC has launched in a month as pressure builds in the government to rein in what cable’s harshest critics call an unregulated monopoly.

The National Cable Television Assn. said it looked forward to the new inquiry. The association said it expected that the study “will reintroduce a note of reality into the debate over cable rates, which during 1989 rose at a rate only about half of the overall consumer price index.”

On Dec. 12, the commission began a study, as required under the 1984 Cable Act, to determine how the law has affected competition.

Sen. John Danforth (R-Mo.) introduced a bill late last year that would give local authorities the right to regulate cable prices if there were only one cable provider in the community, while also making it easier for cities to revoke a cable franchise if the operator provides consistently poor service.

Virtually all cable system are monopolies.

FCC Chairman Alfred C. Sikes said Thursday that the new cable inquiry was designed “to stimulate a more competitive environment” in the cable industry “and provide some assurance, some safeguard, for the public.”

The commission said the inquiry would consider, among other questions:

- Should effective competition be redefined to mean four or more broadcast stations in a cable market, instead of three?

- Do cable systems have competition from other video-delivery methods such as satellites and microwave systems?

- Does high cable viewership mean undue market power or, on the contrary, indicate that a valuable service is being provided?

- Should viewers be allowed to order cable service on a per-channel, “a la carte” basis?

The commission also said it would consider reimposing financial reporting requirements for cable operators that were discontinued in 1983 and require local authorities to use a specific rate-making method.

The commission said it hoped to finish the inquiry by July, when it said it will report to Congress on the effects of the 1984 act.

In other actions Thursday, the commission:

- Proposed easier application requirements to speed deployment of cellular phone service in areas not being served by a community’s two major cellular telephone providers.

- Approved an application by the Communications Satellite Corp. to provide $125 million toward the purchase of five new satellites that Ford Aerospace Corp. is building for the Intelsat world communications system.