Cable Rates Make Case for Telecomm Regulation
Posted on February 2, 2006 by oregoncub
Tags, Telecommunications and CUB Connects
Did you catch the news about cable rates last week? If not, here’s a quick update: Comcast raising cable rates again, Oregonian 01/25/06. “How is this possible,” those of you seeing the 7% annual increase, may be asking. The short answer is: they’re deregulated.
The Federal Telecommunications Act of 1996 effectively deregulated cable companies and kept wireless telephone companies from ever having to meet regulatory standards. That is why CUB opposed the bill, along with the national organization, Consumer Federation of America. Despite that opposition, the bill passed, and cable bills began to skyrocket. Thank goodness we had better luck when Enron came knocking with their electricity deregulatory scheme back in ‘97. Thanks to many organizations, with CUB in the lead, we were able to practice a little energy legislation judo on Enron, throwing the weight of their call for change toward an energy restructuring bill, SB 1149, that actually improved the way electricity is regulated and structured in the state of Oregon.
This has been a major fight across the utility industry for a decade or more, with every large utility company asking for deregulation, so that “competitive markets” can bring the price down for customers. A safer way to inject competition into utility markets is a model in which either several private companies vie for shares of a market within a regulated system, or one in which a private company is competing with a publicly owned utility service (for example, note lower local cable rates in Ashland, where the City offers cable service). The unregulated monopoly model is the worst for customers. Regulation of utility services provides a much-needed restraining influence on price and a helpful oversight of the quality of those services.
Other cities have pursued the idea of publicly-offered telecommunications services. The City of Eugene passed a ballot measure, with CUB’s support, that allowed the City’s public electric utility, EWEB, to explore building its own telephone, cable and broadband network. The Power Crisis of 2001 intervened and postponed the plan, but the city retains the right to move ahead. Portland has also looked into a public-private partnership, such as the one just finalized in Philadelphia, PA, wherein the city offers the right-of-way for wireless broadband network to a private company in return for reduced rates for the city’s residents (Philadelphia’s contract is with Earthlink).
Because of Ashland’s success in setting up a publicly-offered cable network, we’ve seen Qwest and Comcast lobby for bills that would prohibit public ownership of telephone, cable, and broadband networks. This kind of activity applies to the telephone market, as well. For years, Oregon’s primary telephone providers, Qwest and Verizon, have pushed for deregulation of local telephone service (long distance service has been deregulated for some time).
Recently, a Task Force on Telecommunications Law Revision was appointed by Gov. Kulongoski to investigate issues of the industries (cable, telephone, wireless, broadband). Of the 10 voting members, four are state legislators, five are industry representatives, and one is a consumer advocate. That consumer advocate is Bob Jenks, CUB’s long-time executive director.
While the industries continue to push for deregulation in hopes of extracting more profit with less stringent quality checks, Bob will continue to hold the line for customers who want good service at fair costs.
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03/10/17 | 0 Comments | Cable Rates Make Case for Telecomm Regulation