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Senate passes NLC-backed cable bill, substitute defeated.

In a victory for cities dealing with anti-competitive practices and poor customer service by cable operators, S.12, the Senate cable bill was passed on Friday by an overwhelming 73-18 vote.

The National League of Cities, along with the U.S. Conference of Mayors (USCM), and the National Association of Countries (NACo) sent a joint letter last week to every member of the Senate strongly opposing any substitute bill or amendments that would weaken the current provisions of S.12.

In earlier deliberations over the bill, Senator Danforth (R--Mo.) cited "horror stories from consumers and municipalities across the nation, Senator John Danforth (R-Mo.) urged his fellow members to end anti-competitive practices by the cable industry by enacting S.12, the "Cable Television Consumer Act of 1991."

However, rumors of a "substitute" cable bill were realized when Senator Bob Packwood of Oregon told the Senate that he, along with Senators Ted Stevens (R-Alaska) and John Kerry (D-Mass.), were submitting a more "reasonable alternative." Packwood said he opposes S.12 because it would "hamper cable operators" through unnecessary regulation of rates and programming. In his opening remarks, Packwood lauded the 1984 Cable Act and said that "much of the current criticism of the cable industry is misdirected."

A series of amendments were passed during the deliberations last week, some of which strengthened the bill on behalf of cities.

[section] Addition of NLC-sponsored language allowing cities to adopt stricter customer service standards.

[section] Removal of technical infeasibility standards on renewals.

[section] Removal of language which would only allow cities to require stricter customer service standards if they were a franchise or involved in a renewal.

In his opening remarks prior to floor debate on S.12, a bill he introduced just over a year ago. Danforth said "It has been the philosophy of my party to oppose regulation--but it has also been the philosophy of my party to oppose unregulated monopolies . . . and it is clear that the cable industry is an unregulated monopoly." Danforth then began reading a list of cities and their rate hikes--many topping 100 percent--since the 1984 Cable Act and the deregulation of the industry.

NLC has been supportive of S.12 as a step in the right direction by Congress to promote competition and protect consumers from excessive rates. The substitute, as submitted by Senators Packwood, Stevens, and Kerry, fails to address many of the concerns raised by consumers and municipal officials.

Rate Regulation

The bill allows municipalities to regulate the basic tier when there is no effective competition--defined as six or more over the air broadcast signals by the Federal Communications Commission (FCC). In addition, if fewer than 30 percent of subscribers take only the basic tier, then the FCC can regulate the next tier to which 30 percent subscribe, as if it were basic.

Also, S.12 gives the FCC the authority to regulate rates for tiers of programming including program services such as CNN and ESPN, if it receives a complaint that makes a prima facie showing that a particular rate is unreasonable. The Packwood/Stevens/Kerry substitute would only allow the FCC to regulate the basic tier, and defines basic cable service as only the broadcast signals, C-SPAN I & II, and public access (PEG) channels.


On the competitive provisions of S.12, the substitute bill does not contain the following major provisions that are included in S.12.

[section] Access to Programming/Programming Distribution--S.12 would provide access to programming for other multi-channel video distributors (e.g. satellite distribution) and prohibits discriminatory pricing, terms, and conditions for these competitors.

This provision would also prohibit cable operators from requiring a financial interest in programming as a condition of carriage. This practice is now commonplace in the cable business, allowing cable companies to own interest in the physical infrastructure or "hardware," and also in the programming itself, or "software."

[section] Vertical and Horizontal Integration--S.12 requires that the FCC adopt limits on the number of cable subscriber accounts that any one cable operator can own, and the amount of cable-owned programming that can be carried on a cable system. These structural limits would promote competition and ensure a diversity of programs and viewpoints on cable systems.

Customer Service Standards

The substitute requires that the FCC (not local franchise authorities) establish customer service standards which may also be enforced by the FCC. S.12 permits the franchise authorities to adopt stricter standards than those of the Commission, while the substitute only permits the states to adopt stricter standards.

A more detailed account of the final bill will be included in next week's NCW. For more information call Anna Pulido Ferrera in NLC's Center for Policy and Federal Relations, (202) 626-3020.
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Title Annotation:National League of Cities
Author:Ferrera, Anna Pulido
Publication:Nation's Cities Weekly
Date:Feb 3, 1992
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