Cable TV Business Opened to Phone Companies
ALEX CHADWICK, host:
Back now with DAY TO DAY.
The average cable TV bill has almost doubled in the last 10 years. But in areas where consumers have a choice in cable providers, bills are 17 percent lower. That's from a new study by the Federal Communications Commission. And to encourage competition, the FCC voted yesterday to help phone companies deliver more TV and video.
John Dimsdale joins us from Marketplace.
John, a 17 percent difference in the bills. That's pretty big. What did the commission decide?
JOHN DIMSDALE: The cable TV franchises are handed out by local governments, county councils, sometimes city councils. And the FCC had been getting complaints from phone companies that had been trying to break into the cable TV business, that local governments were imposing unreasonable demands and delays. The company said it can take more than a year and a half for local politicians to give them the permission to offer an alternative to cable monopolies. So the commission put a 90-day deadline on local governments to process these applications. They also limited the conditions that locals can impose on the newcomers. For example, some counties require new cable providers to wire up everyone in the region before they can throw the switch and start TV service to everyone.
The phone companies wanted to phase in the service as soon as the wires are in place. So the federal commissioners who approved the new rules on a 3-2 vote said they'll speed up competition in the cable TV marketplace.
CHADWICK: And consumer advocates are happy with this, I presume.
DIMSDALE: Well, actually, they're not. In fact, many say this will not serve either consumers or the public good. They say that local governments need the ability to require cable service providers to be good public citizens. For example, many counties force cable companies to pay for and run communication networks that are used by police and fire fighters and ambulances as a condition for setting up shop in their region.
Mark Cooper of the Consumer Federation of American says local governments should have that right.
Mr. MARK COOPER (Consumer Federation of America): Those are all local government functions. The communications networks that they ask the cable operators and the telephone companies to provide as part of the privilege of selling cable service in their counties is a fair social bargain to be made.
CHADWICK: Well, John, does the FCC have the authority to dictate rules to county and city councils?
DIMSDALE: The three commissioners who voted for the new rules say the FCC's mandate to regulate video competition does give them the right. But the two who voted no, who are both Democrats, accused the commission of riding roughshod over local jurisdiction. So local governments, consumer groups and cable companies are challenging this FCC decision in the courts.
Today on Marketplace, we're looking at job discrimination in Mexico, where companies can specify preferences for gender and age, even looks, in their hiring. And some American companies south of the border are following suit.
CHADWICK: Thank you, John Dimsdale, of Public Radio's daily business show, Marketplace, from American Public Media.
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