Federal authorities should consider reimposing price restraints on cable TV systems if many viewers depend on cable to receive local TV signals clearly, the Federal Trade Commission says.
The FTC made the recommendation Wednesday in comments filed with the Federal Communications Commission.Hills and tall buildings can obstruct TV signals and make reception poor for some viewers, who must then rely on cable to receive even local signals clearly.
In such cases, the FTC said, "a good basis for regulation might exist."
The FTC did not suggest what percentage of viewers should be dependent on a cable system for good TV reception before its proposal would take effect.
The FCC will consider the FTC's comments and those from other groups in deciding how to redefine a competitive standard for cable. Industry groups hope the new definition will derail some efforts in Congress to impose new price regulations on the industry.
The National Cable Television Association had no immediate response to the FTC proposal.
Some members of Congress, encouraged by widespread complaints about skyrocketing cable rates, are promoting legislation that would return to local governments the power to regulate rates for basic cable service. Most communities lost that authority in 1987 under the 1984 Cable Act.
Industry groups argue that cable subscribers are demanding more channels and better shows and must pay for them. They say also that local officials unwilling to approve rate increases kept cable prices artificially low and are partly to blame for the rapid increases that followed deregulation.
Under the 1984 legislation, cable systems were exempt from local rate regulation if they were found to have "effective competition," as determined by the FCC.
The commission defined effective competition as three broadcast stations in a cable system's market, which freed 97 percent of the nation's cable systems from rate regulation.
"The threat of rate regulation could induce cable systems to re-configure their basic service packages such that they consist mainly of local broadcast stations," the FTC said.
Such a ploy would allow cable systems to avoid price constraints on their bread-and-butter pay-cable channels.