Public Interest Group Calls Cable Deregulation a 'Failure'
August 14, 2003
A consumer advocacy group has accused the cable industry of anti competitive practices and price gouging its customers.
Calling the 1996 deregulation of cable a "failure," the U.S. Public Interest Research Group (PIRG)'s report was endorsed by several groups including the Consumer Federation of America, the Center for Digital Democracy, the Media Access Project and the Consumers Union.
The report compared the deregulation promises of 1996 to cable consumer realities of 2003 and found the following trends, in addition to those listed above: industry consolidation has increased; cable continues to deny competitors access to critical programming; wireline competition is nearly non-existent; and the cable industry dominates the broadband internet market.
"Since deregulation seven years ago, the cable industry has price-gouged consumers by raising its prices more than 50 percent," said Ed Mierzwinski, consumer program director for U.S. PIRG. "Congress promised that deregulation would bring competition and lower prices. Instead, the industry has raised prices and used anti-competitive practices to prevent consumers in nearly every market from having a choice of cable providers, a choice that would lower their rates and improve their terrible service."
Mark Cooper, research director for the Consumer Federation of America said decision-making should be moved from Washington to local communities and said the FCC has "simply lost touch with reality."
The report recommends:
* Congress must allow state public utility commissions to regulate all cable rates and charges for video services until meaningful competition emerges.
* Introducing an a la carte programming requirement to expand consumer choices.
* Modifying the existing federal program-access law to eliminate loopholes that have allowed the cable industry to continue anti-competitive practices, such as locking up must-have programming.
Calling the consumer groups' claims "wild and unfounded," the National Cable and Telecommunications Association (NCTA) said the cable industry's investment of "more than $75 million" over the past decade has brought "unprecedented choice and value to tens of millions of Americans."