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Little change expected in cable TV rates because of March 31 date

Cable deregulation milestone comes and goes

Beginning March 31, a majority of U.S. cable subscribers faced unregulated pricing for the first time since 1992, thanks to the 1996 Telecommunication Act. But for many folks, the day passed unnoticed.

“It’s never really been an issue for us,” said Stacey Kirkland, customer operations manager of Rankin County Cablevision.

The 22,300 subscribers of Rankin County Cablevision will receive an 8% rate increase May 1, but not as a result of deregulation.

“We usually take an annual increase,” she said. “Our rates have always been below what the FCC says is allowable. I know cable systems do not like to take rate increases because customers do not like them but they’re unavoidable if we want to improve our services and technology.”

Bob Moss, president of the Mississippi Cable Telecommunications Association, said it’s business as usual.

“March 31 did come and go without any fanfare,” he said. “There were no operators that I know of waiting in the wings to jack up their rates. One of the reasons the sun set on this portion of legislation is because the marketplace is viewed as competitive. Operators are going to have to be very careful in regard to their rates because there are alternatives for their customers.”

Moss, also director of community and public relations for Time Warner Cable in Memphis, said the company’s philosophy mirrors the association’s.

“We have no plans to increase our rates this year,” Moss said.

State Sen. Vince Scoper (R-Laurel), a public utilities committee member, said he is somewhat skeptical of the impact federal legislation will have on consumers.

“When (Congress) changed legislation a couple of years ago, and the rates were supposed to go down because of competition, the rates actually went up,” he said. “However, since it is federal legislation, there may have been changes of which I am unaware. Just looking at experience of deregulation before, it gives you a little cause for concern.”

The saga began in the early 1980s, when Congress passed the 1984 Cable Act. Effective January 1987, legislation provided federal pre-exemption of local rate controls.

“We were not an unregulated industry,” said Frances Smith, public affairs director for Capitol Cablevision. “At the time, the cities regulated us.”

In 1992, the cable act was reregulated, effective April 1993. The FCC required a 10% rollback in September 1993, and an additional reduction of 7% the following summer.

“The federal government said to roll back basic service rates, but also said we could add whatever was taken off the basic (rate) back to the tier,” Smith said. “So it was pretty much neutral. In some of our markets, according to the federal formula we had to follow, we could have given bigger rate increases. We were actually charging less under deregulation in some of our markets than we were allowed to charge.”

About half of Capitol Cablevision’s 75,000 subscribers — those in outlying areas — received an annual rate increase of 4.9% in January, Smith said.

“Historically, cable companies raise their costs once a year due to increased administrative costs and increased programming costs,” she said.

Markets in some states necessitated FCC action, “but you did not see that problem in Mississippi,” Smith said. “That’s why there was no difference when March 31 came and went.”

“The deregulation date has been planned for a long time,” she said. “We knew we would no longer be regulated on that second tier of services. Under the formulas, we’re limited to a certain percentage but the reason they lifted the regulation is because the marketplace dictates it. There’s plenty of competition out there — satellite dishes, wireless services, etc. — to keep the rates in line.”


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About Lynne W. Jeter

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