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Communications Daily.

November 24, 2003

Reacting to a recent General Accounting Office report on cable rates, 2 foes debated the relative merits and drawbacks of re-regulating the cable industry. Consumer Federation of America (CFA) Research Dir. Mark Cooper told the audience at a Manhattan Institute Forum that the only thing that disciplined cable rates was wireline competition and that satellite was not a comparable alternative for many people.  Referring to cable providers as "monopolists," Cooper said the Commerce Committee of Sen. McCain (R-Ariz.) should promote the concept of tiering at the very least to give consumers more choices. "We would like to see consumer sovereignty.  Give us choices," Cooper said.  He also is an advocate for giving 3rd-party Internet Service Providers (ISPs) access to cable's high speed data lines. He said that, aside from Time Warner, which is under govt. mandate to offer independent ISPs, other cable operators were doing it only as a political ploy.  Cable operators by and large have said offering competing ISPs is a good business model and should be handled through private negotiations rather than govt. intervention. Thomas Hazlett, a former FCC chief economist and fellow with the Manhattan Institute, essentially called previous attempts at cable regulation an abject failure. Using graphs, he said demand for cable services dropped, as did the annual increase in channels available, in the couple of years in the 1990s when cable was regulated.  "Quality was being wiped out," Hazlett said.  He also argued that rising rates was not synonymous with high rates and in fact that if cable truly were a monopoly it would set rates at an artificially high price and wouldn't have to raise it each year. While Cooper cited the dispute between Cox and ESPN as an example of why there should be a la carte or tiered pricing, Hazlett said companies had found that consumers liked to be offered a big bundle of choices out of convenience and personal preference. -- BG

©2003 Communications Daily

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