WASHINGTON (AP) — Senators say they will consider new
regulations for cable television unless the industry addresses
soaring prices and allows consumers more channel choices.

Members of the Senate Commerce Committee said pressure from
angry constituents is leading them to look at ways to hold down
cable rates and let subscribers choose individual channels rather
than packages set by operators.

“This is fair warning: If you don’t do something
about it, we will,” Sen. Trent Lott, R-Miss., said March 25,
addressing cable executives waiting to testify. “There is a
point where people will rebel. They’re going to holler at us
and we’re going to take it out on you.”

One way to hold down rates, lawmakers said, is for cable
companies to let their subscribers pay for individual channels
rather than forcing them to buy packages.

“I go down to buy a loaf of bread,” said committee
Chairman John McCain, R-Ariz. “I don’t have to buy
broccoli and milk to go with it.”

Since Congress deregulated the industry in 1996, cable rates
have increased by 53 percent while inflation has risen 19 percent.
Cable operators said the jump reflected higher programming costs,
more channels and system improvements such as rewiring to provide
digital TV.

James O. Robbins, president of Cox Communications Inc., said
some broadcasters are forcing operators to pay for their cable
channels in exchange for the right to carry network programs.

For example, in January 2000, some 400,000 Cox customers in the
Washington area, Cleveland, Dallas and Houston lost the Fox network
for a week in a dispute over whether the cable company also should
have to carry two Fox cable channels.

Robbins also said broadcasters are charging exorbitant prices
for popular channels.

George Bodenheimer, president of ESPN Inc. and ABC Sports,
rejected that argument. “It is simply wrong to blame ESPN for
the retail price decisions of cable operators,” Bodenheimer
said.

Consumer groups blame the rising cable rates on lack of
competition. The General Accounting Office, the investigative arm
of Congress, has found that rates were lower in those few cities
where two cable companies competed for customers.“The fact is
large cable operators simply do not compete with one
another,” said Gene Kimmelman, senior director for public
policy at Consumers Union, publisher of Consumer Reports
magazine.

The Parents Television Council, a conservative advocacy group,
sent a letter to Congress urging it to force cable companies to let
customers buy only the channels they want.

But Bodenheimer said consumers now accustomed to getting ESPN on
a tier with other channels would object if they had to pay for the
sports network separately.

The GAO’s director of physical infrastructure issues, Mark
Goldstein, warned that so-called a la carte programming may not be
the panacea its advocates think it is.

For consumers to select channels they would need cable boxes
that unscramble only those they want to buy. Rent for such boxes
averages $4.39 a month.

In addition, some cable channels could go out of business if
they can’t attract enough advertising, while others might
charge more to systems to carry them. “It is possible that
cable rates could actually increase for some consumers,”
Goldstein said.
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