Regulation Policy

Capping Cable TV Rates

Should the government control cable television rates? Some members of Congress think so. They argue that the rates are climbing faster than the rate of inflation -- 7 percent last year versus less than 2 percent for inflation.

But critics of government price controls have arguments of their own.

  • Partial deregulation of cable TV between 1984 and 1992 was accompanied by growing investment in the industry as well as technological advances.

  • Congress should let price regulations expire as scheduled in March and outlaw monopoly franchises -- thereby inviting greater price competition and improved service.

  • In the 80-plus communities where consumers can chose between competing cable providers, rates can be as much as 20 percent lower than in those where rates are regulated.

  • Potential cable competitors are numerous, including telephone companies, satellite-dish makers and master antennas in multi-family buildings that can pull down satellite feeds.

Critics of government regulation contend that competition will be plentiful once the threat of price controls is removed.

Source: Editorial, "Memo to Congress: Get Out of Cable TV," Investor's Business Daily, August 7, 1998.

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