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Consumer groups urge competition in cable

UPDATE: The Senate Commerce Committee hearing on video competition scheduled for Jan. 31 has been postponed.
Monday, January 30, 2006
Consumer Groups Urge Competition in Cable
But Telephone Companies Should Ensure Broadband and Video Service for All
(Washington, DC) – Consumer groups tomorrow will urge Congress to ensure that telephone companies seeking exemptions from local government control (known as local franchises) be required to offer new video and Internet services to all consumers in the markets they enter, not just wealthy consumers.
“Since the deregulation of the cable industry in 1996, consumers have watched their cable rates skyrocket by 64 percent—nearly two and one half times the rate of inflation,” said Gene Kimmelman, Vice President, Federal and International Affairs, Consumers Union. “Telephone companies now want to get local regulators out of the way and offer video services to compete against cable. While this competition could lower cable bills, Congress must be careful not to sacrifice local community needs or abandon consumer protections in the video and Internet marketplace.”
Kimmelman is testifying on behalf of Consumers Union, Consumer Federation of America, and Free Press at tomorrow’s Senate Commerce Committee hearing on video competition. The major telephone companies are seeking exemptions from local government requirements which govern cable operators. These local franchise agreements address local needs, such as providing service to all consumers in a market.
Kimmelman said, “Telephone companies should be required to serve all consumers. If they won’t commit to that, then they should provide resources so local governments can offer broadband services to those consumers the telephone companies won’t serve.”
“The absence of those requirements opens a wide door to economic and ethnic discrimination (“redlining”) and closes the door to rate relief for those families who most need it and who have largely been left on the wrong side of the digital divide,” said Kimmelman.
The groups outlined seven factors that need to be addressed to ensure that as telephone companies begin offering video, the benefits of new technology and competitive markets accrue to every American household. Congress should:
o Require new video competitors to provide service to all customers within the local franchise area or provide significant financial resources to the locality to improve affordable access to broadband technologies for those not served by the broadband provider;
o Require consumer protections be provided locally to ensure customer service and billing complaints are quickly and satisfactorily resolved;
o Ensure complete protection of the locality’s right to manage and be fairly compensated for use of the public rights-of-way;
o Set minimum requirements to ensure providers are truly supporting local needs, including capacity and resources for local access channels with independent programming reflecting community diversity and institutional broadband networks;
o Eliminate preemption of local government’s right to provide broadband communications services in order to provide redress for redlining;
o Address anti-competitive bundling and tying requirements imposed by dominant media companies that leave consumers without real choice or competition; and
o Enact strong, enforceable prohibitions blocking, impairing or otherwise discriminating against access to content or services on the Internet.
A complete copy of the remarks is available at www.HearUsNow.org.


Contact: Jennifer Fuson, 202-719-5921