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from: Oregan Live

Basic cable bargains could be short-lived
Change - The rates have been flat, but federal rules allow operators to opt out if there's effective competition

Tuesday, May 08, 2007
MIKE ROGOWAY

Most cable TV viewers feel the bite every year as rates go up, up, up.

Subscribers with the most modest viewing options, though, rarely feel the pain. That could change this year, as cable operators begin trying to free themselves from local price regulation.

Basic cable, the stripped-down package of 30-some local broadcast stations, public access and community programming, is the only cable package subject to local oversight. And it's the one package in the region for which rates have stayed low -- in some parts of the metro area, little more than $8 a month.

Compare that with the $50.89 that subscribers pay for Comcast's "standard" 70-channel package. While standard, unregulated cable rates have risen at an average clip of more than 6 percent annually for the past decade, basic cable rates have often been flat -- or in some cases have even declined.

Such basic bargains could be going away, though. Federal rules allow cable companies to opt out of basic cable regulation and other local oversight when faced with "effective competition."

This spring, Comcast filed to lift price regulation in Clark County, citing competition from satellite TV that the cable company says exceeds 15 percent of all subscribers in the county. When Verizon starts offering cable TV service in Washington County late this year or early in 2008, federal rules will make both Verizon and Comcast eligible to opt out, regardless of satellite penetration.

Comcast says competition will keep rates low, but regulators lament the loss of local oversight.

"It's one of those situations where rate regulation works," said Fred Christ, policy and regulatory affairs manager for the Metropolitan Area Communications Commission in Washington County. If the restrictions are lifted, he said, "It'll be up to Comcast what they want to do with the rates."

Relatively few viewers choose basic cable, which lacks popular channels such as ESPN, Comedy Central and Fox News. In Clark County, only about 1 in 20 cable subscribers choose basic.

But relaxed local regulation could affect viewers in other ways, according to Donna Mason, director of the City/County Telecommunications Commission in Clark County. Under "effective competition" rules, Mason said, Comcast would be freer to choose which local channels it broadcasts and could also charge different rates in different neighborhoods.

The Clark County cable commission voted last week to oppose Comcast's "effective competition" filing, now before federal regulators. Before Comcast is released from local price regulation, it must complete a federal process that could take months.

Comcast has not sought to exempt itself from local regulation in Multnomah County or Washington County, and the company declined Monday to say whether it will. But whatever happens, Comcast spokeswoman Theressa Davis said subscribers shouldn't expect a sudden surge in rates.

"In a competitive video environment, the marketplace ensures that prices are reasonable and service offerings are competitive," she said.

Mike Rogoway: 503-294-7699; mikerogoway@news.oregonian.com; blog.oregonlive.com/siliconforest