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TCI rates deregulated

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by Karen E. Culp

SBJ Staff

TCI will now make up its own corporate mind about the rates it charges customers for expanded basic cable. The cable company gained the authority with a lessening of regulatory authority over its rates that took effect March 31.

Expanded basic cable rates formerly regulated by local government and the Federal Communications Commission will no longer be subject to such regulation. A portion of the 1996 Telecommunications Act went into effect March 31, taking away the regulatory authority of cities over the upper tier of cable channels, those commonly called "expanded basic" channels, said Ross Summers, general manager of TCI of Springfield.

"The 1992 Cable Act allowed cities to regulate expanded tiers in the cable system, and for that time, Springfield has regulated those tiers, but now that ability has sunsetted, as per the Telecom Act," Summers said.

Though that particular regulatory authority has expired, Morgan Broman, spokesman for the Cable Services Bureau of the FCC, said the agency will continue to monitor the cable industry.

"It remains that cable television accounts for 85 percent of the video entertainment market, and we will still be monitoring that market to make sure there's adequate room for new entrants, such as new cable companies or direct broadcasting satellites," Broman said.

Broman said there was some concern that costs for the expanded basic services would rise, and the bureau has issued a cable consumers' bill of rights that outlines steps customers can take to make sure their company is being fair with them.

Summers said costs would increase as a normal course of business, just as in any other industry, but not as a direct result of the deregulation. The basic cable tier of services will continue to be regulated. Basic cable in Springfield are channels 2-29. The city will continue to have oversight over those rates.

Nancy Yendes, an assistant city attorney who has worked on a number of telecommunications issues, said the city will continue to be aware of TCI's price changes and take action accordingly.

"We'll continue to have the same concern we've always had even though the regulatory environment has changed," Yendes said.

Summers said the city's role in regulation should be decreasing, as the price of cable should be what the market dictates.

"I think the entire country is tired of the regulatory shackles that have been placed on businesses over the years. This is an example of an attempt to get back to a deregulated environment and more of a market economy," Summers said.

Prior to 1992, rates were not regulated in any way, Broman said. Cable television has existed, in some form, since the 1940s, Summers said, though it really became widespread in the 1970s.

"The regulatory environment has always played a major role in our industry, but despite that regulation, we've been able to survive and grow and prosper, in large part because we have a product that people appreciate and want," Summers said.

The city will continue to monitor the pricing of basic channels, making sure those rates are just and equitable for this market. The expanded tier is the one that is subject to the most cost increases for TCI, Summers said, because of the number of specialized cable networks contained therein.

"In the lower tier you have the airwave channels and the access channels, and there are not the programming costs associated with those as there are with the specialty channels," Summers said.

Increases in rates are a direct result of increases in programming costs for TCI, he added.

"There are uncertainties in our programming costs. We have no control over what the programmers charge us," Summers said.

Because there are fees for every channel in the expanded basic tier, the company is "more at the mercy of programmers," in establishing the costs for that service, Summers said.

TCI is now owned by AT&T, and in the next few weeks, the local company's name will change, though Summers did not yet know what the new name will be. It will identify the cable company as a component of AT&T, though, he said. Other than "changing signs and logos on our trucks," Summers said, there should be no direct changes of business practices at the cable company.

TCI has added one service, digital cable, in the past two years. About 15 percent of TCI of Springfield's subscribers are now on the digital service. TCI will add high-speed Internet access, through its @Home program, in coming months.

The Internet access, provided through a cable modem subscribers will have to purchase, will probably roll out in Springfield in the second half of 1999, a little later than the company had originally planned because of the length of time it has taken to upgrade portions of its system, Summers said.

"We've run into a few problems we weren't anticipating, and the weather has been some concern to us, but we're moving forward with the rollout," Summers said.

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