Tripping Over TV Cable

Watching cable TV is getting more expensive. Consumer cost keeps going up despite the 1996 Telecommunications Act, which was supposed to spur competition, bring down rates and improve service. We’re still waiting for all three of these changes.

The disappointing situation warrants a review by the Federal Communications Commission and local governments. Millions of cable subscribers are grousing about their cable operators, many of which arbitrarily reassign channels or drop or add services apparently at whim. Meanwhile, subscribers’ bills are ever higher. Cable rates have jumped 7% nationally this year, and an increase of another 7% in January alone is expected for subscribers to the nation’s three largest cable companies.

The competition that telecommunications reform was suppose to create in the cable arena has been elusive so far. Nowhere is there a mad scramble for cable and telephone companies to consolidate Internet, digital television and telephone charges into a single service, which some media experts had forecast. Reed Hundt, the FCC chairman, acknowledged recently that the competition policy had been “founded on two false premises: that cable would rebuild for telephony and telephone companies would rebuild for cable.”

What’s happened instead is that long-distance phone companies zeroed in on local phone service, a market five times larger than the $23-billion cable market. Local phone companies began to merge to better compete against long-distance carriers.

That left cable pretty much untouched. Most companies, with virtually no cable competition, still have captive customers. In Los Angeles, for example, there are 14 cable TV franchise areas, each with a single operator. The exclusivity is not mandatory, but because building a competing cable system would be so expensive total market domination is the rule. In those few markets where there has been competition, market forces work. Faced with GTE moving into cable in Thousand Oaks, Falcon Communications is cutting its prices for premium channels by half for its subscribers in the community, who make up only 4,000 of Falcon’s 1 million customers.

Smart cable operators will treat their subscribers with some tender loving care. Otherwise more might opt for direct satellite TV . . . or even rabbit ears and the free TV they deliver.