If you've noticed that the Telecommunications Act that Congress passed last February hasn't kept cable TV companies from jacking up rates, you're not the only one. Our friends on Capitol Hill and in the labyrinths of the FCC have noticed, too. And frankly, they're peeved.
The same sequence of events that always seems to follow the passage of major legislation in Washington has unfolded again. In the telecom world, it goes like this:
Lobbyists promise that the telecom bill will make consumers - who often happen to be voters - pledge their undying love for a politician. The bill deregulating the telecommunications industry passes. Multibillion-dollar companies immediately start suing each other to protect their markets. Competition languishes. Companies respond by raising rates, because it may be the last time they can before competitors invade their markets. Consumers get mad. They tell Congress. Congress blames the FCC.
In the case of the telecom act, the issue is timing. A whole lot of admittedly optimistic proponents of the new law thought consumers would be lounging in their easy chairs by now, leisurely deciding which thirsty competitor to bless with their business. They were wrong. Instead, that typical post-deregulation, hurry-up-and-wait depression has set in.
At last week's annual Western Cable Show in Anaheim, California, at least one regulator was blunt. FCC commissioner Susan Ness - in her usual gentle tone - told cable TV operators in attendance to watch their backs in 1997.
"There is beginning to be public outcry on this," she warned. "This is going to be a serious issue this year." Ness said this growing discontent is working its way into the congressional phone banks, and into lawmakers' agendas.
Indeed, Republican Senator John McCain of Arizona - who's set to become chairman of the House Commerce Committee - has said he plans to hold telecom hearings first thing next session.
And Decker Anstrom, the National Cable Television Association's skillful president, who has largely salvaged the industry's once-dismal image on the Hill, called on the industry at the Western Cable Show to "be careful about rate hikes."
TCI chairman John Malone, who Vice President Al Gore once called the "leader of the cable Costa Nostra," tore Anstrom's warm-and-fuzzy vibes to bits. "For us to be shy on rates or getting a return on capital is foolish," he barked. Then he threatened to pull even popular networks if they don't stop raising carriage rates.
Although it remains unclear whether Congress will tighten cable TV price controls, which the FCC has considerably loosened since the 1992 Cable Act passed, an increasingly vocal public will certainly force Congress to address the issue come January.
