GOP County to Vote on Cable Rates1/14/2005 3:15 AM Eastern
A northern Illinois county board with all Republican members is scheduled to vote next week on a resolution that calls on federal and state lawmakers to examine whether cable rates should be regulated.
Comcast Corp.’s rate increases, announced in December, sparked a backlash in McHenry County, a fast-growing community of 280,000 people located between Chicago and Rockford on the Wisconsin border.
On Tuesday, a board committee voted 5-2 in support of the cable-rate resolution. The 24-member board is expected to consider it at its Jan. 18 meeting.
“It’s anybody’s guess how it’s going to go. I have no idea,” Ann Kate, chairwoman of the county’s management-services committee, who sponsored the resolution, said Thursday.
Peter Merkel, a committee member who voted for the resolution, said Thursday that he expects the cable measure to pass.
“I think it will pass the regular county board. A lot of people are just frustrated that cable rates just keep going up,” he said.
Capitol Hill Republicans liberated all but basic-cable rates nearly six years ago, and they have shielded cable from a return to a price-cap system ever since.
But some McHenry Country Republicans have decided to break with national leaders.
“Maybe it’s a local revolution. We may not be following the national Republican Party,” Merkel said.
Arguing that cable rates have far outpaced inflation for many years, the McHenry resolution asks Congress and the Illinois state legislature to examine cable prices, especially in markets that lack cable companies that compete with the incumbent.
The resolution urges lawmakers to “implement measures to address those pricing practices resulting from the lack of competition.”
Kate said she was unsure how the vote would go because “you talk about price controls and some politicians get nervous about that.”
Comcast Corp. and Charter Communications Inc. are McHenry’s cable companies, but they don’t compete with each other.
“If we don’t put price controls on them, what can we do?” asked Kate, whose Comcast bill just went up $3 per month for basic and expanded basic.
Expanded-basic cable has risen more than 7% per year over the past five years, or about three times the rate of inflation, according to the Federal Communications Commission.
Price increase have come as cable operators have poured more than $95 billion into network upgrades since 1996, when Congress removed price controls on upper-tier cable services effective March 31, 1999.
Comcast spokesman Bob Ryan said the company upgraded the McHenry system as promised and doubled the number of channels offered in expanded basic -- moves that raised the monthly price of basic and expanded basic to $47 from $33.
“We are working with the county to address their concerns,” Ryan said. “Value lies not in having the lowest prices, but in giving consumers the most choice.”
The cable industry’s chief defense against rate regulation is fierce competition from satellite providers DirecTV Inc. and EchoStar Communications Corp., which together serve more than 20 million subscribers.
Merkel decided to drop cable over rate and service issues.
“Myself, personally, I went to satellite over a year ago. I’ve been very happy,” he said.
Kate looked into satellite but found that it would be more expensive than cable after connecting set-tops to four TVs. Satellite signals, she added, degrade or disappear in heavy snow and rain.
In her view, satellite is not a real alternative.
“There is one cable company, and that is Comcast,” she said. “To us, it may as well be a monopoly.”