More Cable Competition?
Written by JOHN DUNBAR   
Sunday, 17 December 2006

FCC to Vote on Cable Competition Measure

Dec 17, 5:20 AM (ET)

By JOHN DUNBAR

WASHINGTON (AP) - Cable television rates keep going up while prices for other communications services are going down, says the nation's chief communications regulator, and he blames local governments for blocking competition.

On Wednesday, the Federal Communications Commission is scheduled to vote on whether to make it easier for competitors to obtain cable franchises.

FCC Chairman Kevin Martin, in speeches over the past few weeks, has said local franchise authorities at times "obstruct and in some cases completely derail" new attempts to bring video competition to an area.

His proposal is backed by Verizon Communications Inc. (VZ) and AT&T Inc. (T), which have poured billions of dollars into rewiring their old telecommunications networks so they can deliver television programming and other services.

The measure has alarmed local franchising authorities that have heard Martin's remarks. They contend his "barrier to entry" argument is bogus and action by the agency may wind up hurting consumers.

At stake is the battle for America's television watchers. And people in the United States watch a lot of television.

The FCC reports that the average U.S. household tuned in for eight hours and 11 minutes each day in the 2004 and 2005 fall television seasons.

The latest statistics indicate there are 109.6 million television households and 94.2 million of them subscribe to a pay television service such as cable or satellite.

Martin is using public resentment over rising cable prices to sell his proposal. He is expected to release a report at Wednesday's meeting that says cable rates have risen 93 percent from 1995 to 2005.

Not surprisingly, the cable industry rejects Martin's pricing argument. Kyle McSlarrow, president and chief executive of the National Cable & Telecommunications Association, said looking strictly at video prices misses the big picture.

He said Martin's argument is "disappointing" and displays a "complete lack of understanding" of today's market. McSlarrow said customers who subscribe to "triple play" bundles of video, high-speed Internet and telephone service are paying less for their services than a decade ago.