Senators Threaten US Cable TV With New Curbs

29 March 2004

US senators last week warned the cable industry it could expect new regulations if it failed to address concerns about pricing and programming.

The Senate Commerce Committee told representatives from cable-TV companies that lawmakers would not tolerate further large price increases, and wanted to see subscribers given more choice over the channels they receive.

"You start acting irresponsibly, we regulate you," declared senator Trent Lott (Republican, Mississippi). "There is a point where people will rebel. They're going to holler at us and we're going to take it out on you."

The rapidly rising cost of cable-TV -- which the industry claims reflects improvements in programming and services -- has been a frequent cause of irritation to the Committee and regulators. Since the deregulation of the industry in 1996, prices have soared 53%, far higher than the 19% inflation over the same period.

But amid a clampdown on broadcast indecency, there is growing pressure for cable companies to offer subscribers more choice over the channels they receive. Parents groups have pointed out that current cable packages offer children's fare such as Nickelodeon alongside more 'adult' stations like MTV.

One solution put forward by the Committee is to let subscribers choose the channels they want. Senators pointed to Canadian operator Rogers Communications, which allows customers to make their own selection of up to 30 stations and also has family-oriented packages.

These suggestions were attacked by James Robbins (president of cable firm Cox Communications) and George Bodenheimer (president of the ESPN and ABC Sports networks). They argued a scheme of this sort would require new equipment and further investment, raising cable rates even further.

Their comments were echoed by Mark Goldstein, director of physical infrastructure affairs at the General Accounting Office, Congress's investigative division. Letting consumers pick their own stations, he said, could "result in reduced advertising revenues and might result in higher per-channel rates and less diversity in program choice."

Data sourced from: USA Today; additional content by WARC staff