TELECOMMUNICATIONS COMPETITION AND DEREGULATION ACT

Senate - June 15, 1995

Mr. LEAHY. Mr. President, I ask unanimous consent that I be able to proceed for not to exceed 10 minutes on the Lieberman-Leahy amendment, amendment No. 1298.

The PRESIDING OFFICER. Is there objection? Without objection, it is so ordered.

AMENDMENT NO. 1298

Mr. LEAHY. Mr. President, I think the Lieberman-Leahy amendment is necessary because we have to make sure that if we deregulate cable rates, we do not do it on the backs of the consumers. And, right now we are. In most areas in this country, consumers are captive to monopoly cable service providers. In fact, the only thing that stands between the consumers' wallets and the monopoly cable company is regulation.

Under the telecommunications bill, the sure-fire way for a cable company to avoid regulation is to raise their rates across the country. It is very, very interesting what we are doing. If we sent this up for a national referendum, the Lieberman-Leahy amendment would be agreed to overwhelmingly. If we had a referendum by only some of the well-heeled PAC's and lobbyists around here, well then, of course, it goes down. So the question is: Who do we stand with?

We all get paid enough money so that $10 or $20 added onto our cable rates each month probably does not seem like a lot. But to most people living in Vermont or any other State in this country, that is a big difference. Ask people who get cable television in this country whether they think their cable rates would go up or down if monopoly cable companies are left to themselves to decide what the rates would be.

The American people are pretty smart. They know darn well if we let the cable companies have a monopoly and have no regulation, those rates are going to go up. They are never going to come down. The only times they have come down is when Congress stepped in. In fact, when we passed the 1992 Cable Act, President Bush vetoed it, and we overrode the veto, because consumers were being gouged by cable company monopolies. Cable rates were rising three times faster than the inflation rate. Every American knew it, and finally Congress got the message and they overrode the Presidential veto.

Consumers demanded action to stop the rising cable rates. The law worked. In fact, since passage of that law, consumers have saved an estimated $3 billion, and they have seen an average 17 percent drop in their monthly rates. As rates have gone down, more people have signed up. Last year alone, over 1.5 million new customers signed up for cable service. One would think the word would get across: If you keep the rates reasonable, more people are going to join.

The telecommunications bill would lift the lid on cable rates.

Under current law, cable rate regulation is dispensed with only when the FCC finds there is `effective competition' in a local market.

The telecommunications bill, as reported, would change this law by deeming `effective competition' to be present wherever a local phone company offers video programming, regardless of the number of subscribers to, or households reached by, the service.

The bill would also lift rate regulation for upper tiers of cable service, unless the cable operator is a `bad actor' and charges substantially more than the national average. Of course, the national average could be set by the two largest cable companies. They almost have an incentive to raise the national average and the rates.

In fact, the day after Senator Lieberman and I held a press conference to voice our concerns over the cable deregulation parts of the bill, the managers' amendment to this bill was adopted in an effort to provide more protection to consumers from the spiraling cable rates after deregulation. But I do not believe it goes far enough.

The managers' amendment ties rate regulation to whatever the national average was on June 1 of this year, to be adjusted every 2 years. But that still means if the two or three largest cable companies raise their rates, the national average will go up, and rates for all consumers would spiral upward.