|
SUBCOMMITTEE ON TELECOMMUNICATIONS AND
THE INTERNET JULY 14, 2004 Thank you, Mr. Chairman, for calling this hearing. I am very pleased that, at long last, this Committee will focus on the state of competition in the video marketplace. Interestingly, much of the recent conversation on this topic has centered on whether federal law should be amended to promote " B la carte" programming. The notion that consumers should be able purchase only those channels of their choosing - and no more - certainly has intuitive appeal to this consumer, and I am sure it would to most others as well. At the same time, many reputable parties, including the GAO, have concluded that an B la carte marketplace could leave consumers paying more for fewer channels and might also lead to fewer programming choices.Federal law today does not prevent video service providers from offering B la carte programming, but it also does not prevent contractual restrictions on B la carte service. Those who seek to change Federal law to encourage B la carte programming have the burden to demonstrate that such a dramatic change is necessary and will not ultimately hurt consumers. Work needs to be done before that burden can be met.On a related matter, I would note that cable rates continue to rise faster than the rate of inflation. Despite the pleadings of the cable industry, the video marketplace is not yet sufficiently competitive. Most consumers still only have limited choices for their video service provider - the local cable company and the two national satellite companies. These companies compete on programming choices and related services, but they do not appear to compete on price or customer service. A recent GAO report demonstrates that only additional competitors in the marketplace - beyond the existing satellite competitors - force cable companies to restrain their typical price increases. Though the cable industry has criticized this finding as based on too little evidence, it would seem to be simple common sense. The emergence of additional video competitors in the marketplace, with true price competition, is preferable to re-regulating cable rates. That is why I have long championed deregulation of cable's competitors, and I hope that the newly deregulated telephone companies will keep their promise and compete head-on in this marketplace. In addition, federal policy must be aggressive in fostering the development of additional transmission paths to the home. Be it from broadband-over-powerline or new wireless technologies, we must do our part to ensure that consumers are able to benefit as quickly as possible from a competitive marketplace. But if competition does not develop, and my cable friends do not exercise restraint, they will risk, once again, the wrath of angry consumers and an angry Congress. I look forward to the testimony of our witnesses.
- 30 - (Contact: Jodi Seth, 202-225-3641) | |
|
 |
 |
 |
 |
 |
 |
 |
 |
