Cable Needs Competition

On Sunday, hundreds of thousands of subscribers to El Segundo-based DirecTV, the nation’s largest satellite TV service, lost their reception of “The X-Files,” “60 Minutes” and all other programming on the Fox and CBS TV networks. An additional 1.5 million will lose network programming by mid-April. The cause is not some meteorite shower but the belated enforcement of federal laws that ban satellite providers from beaming certain TV stations to their subscribers.

Those laws need revision. They were written for an era when the satellite operations were seen merely as television providers for the unwired hinterlands. What those laws do now, however, is protect cable TV’s monopoly.

A bill by Sen. John McCain (R-Ariz.) that would eliminate many of the regulatory hurdles that keep satellite providers from competing fully with cable TV is up for a Senate vote Wednesday. Reason demands that it pass.

Cable TV needs competitors now more than ever. Since Congress eased cable rate regulations in 1996, with the promise that rates would fall, premiums have actually risen well ahead of inflation. Industry analysts expect them to rise even more steeply after April 1, when cable rate regulations phase out altogether.

Cable companies argue that if Congress allows satellite providers greater entry into urban markets, it ought to require them to carry every single station in each market. This “must carry” argument would shut out satellite providers altogether, for their technology won’t allow them to beam every station to every market for a few more years. That’s why, prior to last week’s court order, DirecTV subscribers, regardless of whether they lived in Portland or Peoria, had been getting their CBS programming from KCBS in Los Angeles.

McCain’s bill solves the problem by exempting satellite providers from the “must carry” requirement until 2002, when technology will moot the point. The bill contains an unfortunate sop to local broadcasters, allowing the government to bar satellite operators from a market if local broadcasters are “materially harmed” in the meantime. But even with this concession, McCain’s staff expects a “blood bath” of broadcast industry opposition.

Eighty-five percent of Americans have only one franchised cable operator to choose from. Satellite providers could expand that choice and even put some downward pressure on prices. Congress will have to prove that it can resist the broadcast and cable industries and yield instead to the public interest.