Company Town : GOP Group Urges End to Cable Rate Cuts : Television: The FCC is warned that modernization plans are in jeopardy.

Just days before the Federal Communications Commission is to consider lowering cable rates, a group of House Republicans has warned the agency that further rate reductions might hurt the cable industry’s ability to help modernize the nation’s information highway.

In a sharply worded, two-page letter to FCC Chairman Reed Hundt, nine members of the House subcommittee on telecommunications and finance--including the ranking Republican, Rep. Jack Fields of Texas--warned that “any further downward rate adjustment by the FCC can only be read as an expression that you do not believe that there is any meaningful role for the cable industry in developing the information highway of the future.”

The letter could complicate Hundt’s efforts to get enough votes at the FCC’s Feb. 22 meeting to lower the so-called benchmark rate on which most of the 11,000 U.S. cable operators must base their pricing. Before the Republicans’ Feb. 9 letter to Hundt, several Democratic lawmakers, including the telecommunications subcommittee chairman, Rep. Edward J. Markey (D-Mass.), had said they generally favored further rate cuts.

Some political observers say any partisan split over cable rates could jeopardize important legislation before the telecommunications subcommittee. Two bills intended to lift regulatory barriers that keep telephone companies, cable operators and long-distance carriers out of each other’s businesses, have had strong bipartisan support. But that could change if the FCC presses for a rollback.

For weeks, Hundt and fellow commissioners Andrew C. Barrett, a Republican, and James H. Quello, a Democrat appointed by President Richard M. Nixon, have been at odds over what to do about evidence that cable television rates are still rising for millions of subscribers, even after 10 months of federal regulation.

Consumers groups have said the benchmark rate--based on prevailing rates charged by cable operators in 1992--was too high, but cable firms say new price limits will derail their plans to expand to 500 channels or more by replacing copper wires with fiber-optic cables.

Last week, the FCC extended its cable rate freeze until May, while it considers whether to impose further rate reductions. “We hope (the FCC) will have the courage and independence to resist the cable TV lobby and order the reduction of still over-inflated cable TV bills,” said Jeff Chester, executive director of the Center for Media Education, a Washington-based consumer group.

Neither Hundt nor his chief of staff could be reached for comment.