Consumed by cable

When Congress passed the Cable Television Consumer Protection and Competition Act of 1992, it required the Federal Communications Commission to issue an annual report on the extent to which the legislation it wrote and promoted lived up to its noble goals.

The FCC’s 1998 version, released last month, concludes that competition is “still developing.” Consumers, repeatedly whacked with higher monthly bills and soaring installation and maintenance charges, no doubt have a less generous assessment regarding protection.

Nationally, cable fees rose by 7.3 percent in 1998, four times the rate of inflation. With the elimination this year of the last remaining federal price controls on cable rates, the FCC estimates increases of up to 20 percent. In the six years the Cable Act has been on the books, only about 100 of the nation’s tens of thousands of communities have gained actual head-to-head competition between cable companies.

Cable operators cite the higher cost of buying programs, but the FCC notes that in those few communities where competition exists, service grows but prices do not. In some cases, rates actually have decreased.

This should be of particular interest to the Bangor region, which, lacking competition, is about to experience the unfortunate norm. Monthly rates are going up, as are installation and maintenance charges, all justified by programming additions of dubious value.

While the high-end rates proposed by local franchise-holder FrontierVision have the greatest shock value (who pays $75 a month for cable?), it’s the low-end changes that are the most troubling.

The 1992 law deregulated cable rates but capped basic cable — local broadcast channels — as a way to preserve a “lifeline” level of service. That last remaining price control sunsets on March 31. FrontierVision will mark the occasion by hiking its basic service from $6.19 to $10.30 per month and by scrapping its $1 senior citizen’s discount. That’s an increase of 66 percent, or, for the elders, 98 percent.

In return, and in keeping with the requirement that rate increases must be accompanied by programming increases, Bangor’s basic cable customers will get seven additional channels. Three are Portland network affiliates that show the same shows as Bangor’s network affiliates. Three are community access channels — educational programs, government meetings, locally-produced amateur hours. “Wayne’s World” is the promise. “Composting Today” is the more likely reality.

But the most telling indicator of what happens when competition doesn’t develop is the charges for installation and maintenance. The cost of wiring an unwired home will go from $25 to $45. It will cost $25 to add an extra outlet, up from $8.49. Transferring service from one wired home to another or changing level of service will cost $35. Only in an unregulated monopoly can a business charge people so much just to become customers or to become bigger customers.

The guiding principle of the Cable Act of 1992 and of the Telecommunications Act of 1996 was that deregulation would encourage cable, telephone, satellite and other communications companies to get in each other’s faces, to try to outdo each other, to undercut each other, to compete. It simply has not happened. The only telephone company to move into cable is Ameritech; it has acquired 87 cable franchises but has so far has done nothing but stake out turf — few of those franchises have been developed into actual service. Bell Atlantic put together a prototype cable system in New Jersey, but already has scrapped it.

The FCC got snookered by the cable industry when it bought the idea that deregulating cable would create unbridled competition. Now the FCC has to defend its blunder by saying that the startling rate increases are justified because cable will have to offer 150 or more channels to remain competitive with direct satellite services. There are two problems with this comparison: Satellite does not run wire along the public right-of-way, hence there is no obligation to serve the public; and the FCC has never asked the public which it prefers — 189 channels (of which 90 percent are of little interest to anyone) at $75 a month, or a good, well-rounded selection of 15 or so channels for $12. Even worse, by letting cable herd the public into the high-end tiers, the FCC has eliminated the possibility of the public ever again having that choice.

If this sounds remarkably similar to the snookering the FCC got from electronic manufacturers and broadcasters in the still-developing digital television fiasco ($5,000 for new sets, $150 or more for a converter box for old sets) it’s because the FCC is sucker for high tech. Tell the FCC there’s something new and astonishing on the horizon and the FCC will work out a way that the public will be forced to pay for it.

But it’s not a total loss. Bangor and the 13 surrounding towns will get a franchise fee from FrontierVision of $1 million spread over eight years to buy the equipment and expertise needed to get those local community channels on the air. That should make for one slick “Composting Today.”