Cable Industry

For decades, the only theft the cable industry worried about was people trying to get MTV and HBO without paying for them. Now some of the biggest cable companies - including Comcast Corp. and Time Warner Cable Inc. - are looking to do more than just safeguard their signals from piracy. They want to use their broadband service to protect your big-screen television, the couch in front of it and even the family jewels with their own home-security systems. They're not just feeling altruistic.

OK, take a deep breath. Find your happy place. Now try this on for size: $200 monthly cable bills. That's the prediction from market researcher NPD Group, which says cable bills of that wallet-busting magnitude could arrive by 2020 . "As pay-TV costs rise and consumers' spending power stays flat, the traditional affiliate-fee business model for pay-TV companies appears to be unsustainable in the long term," says Keith Nissen, research director...

The cable television industry said Tuesday that it will provide free equipment to allow subscribers to block unwanted channels, a reaction to efforts on Capitol Hill to curb indecent programming. The offer is directed to about half the nation's 70.5 million cable subscribers who don't have cable boxes that can be programmed to block certain channels or programs. The companies agreeing to the plan include the 10 largest in the country.

For decades, the only theft the cable industry worried about was people trying to get MTV and HBO without paying for them. Now some of the biggest cable companies - including Comcast Corp. and Time Warner Cable Inc. - are looking to do more than just safeguard their signals from piracy. They want to use their broadband service to protect your big-screen television, the couch in front of it and even the family jewels with their own home-security systems. They're not just feeling altruistic.

The cable industry is roiling with conflicts, from rising rates to skyrocketing programming costs to Rupert Murdoch's plans to buy satellite leader DirecTV and thereby dominate the competition. Yet these divisive issues were barely mentioned by top executives last week at the industry's annual convention here. The reason, according to several participants: They were executing a well-orchestrated plan to keep the mood upbeat for Wall Street, Washington and the press.

The cable industry could finally earn some respect in 1997 and emerge from the shadows of a dismal 1996 as new services finally begin rolling out. Despite consumer outrage over the industry's never-ending rate hikes and service record, many analysts are looking to a successful launch of digital set-top boxes and high-speed cable modems. Cable stocks could even rebound from their all-time lows this year. And new federal rules and a court ruling on channels could mean big changes for the industry.

The cable-TV industry is trying to block a leading performance rights organization from collecting music royalty fees from both cable networks and local cable operators for the same transmission. The industry argues that the new plan by New York-based Broadcast Music Inc. would violate antitrust and copyright laws. BMI collects millions of dollars in royalty fees on behalf of songwriters, composers and publishers.

Dennis Patrick's first major speech to a television industry group didn't win him rousing applause. Then again, the 35-year-old chairman of the Federal Communications Commission wasn't exactly telling the cable TV industry what it wanted to hear. Appearing Wednesday at the annual national cable convention in Las Vegas, the new FCC leader said that "this is an industry with a very bright future."

The legislation passed in the Senate on Thursday to reform telecommunications laws has sweeping implications for the cable and broadcasting industries--as well as for consumers of some of their services. For starters, the bill essentially would deregulate cable rates. In the short run, that could lead both to higher cable rates and wider experimentation in the selection and packaging of programming.

After listening to cable television customers complain for years about everything from missed service appointments to fuzzy reception, the government Thursday imposed customer-service standards on the cable industry and warned that operators could lose their franchises if they don't comply.

A sense of urgency surrounds the annual National Cable & Telecommunications Assn. convention in Chicago this week as big media firms grapple with a host of business challenges that threaten their livelihood. An onslaught of new technologies, devices and digital-content-delivering platforms and the nation's growing wealth divide are challenging the cable television industry to no longer take for granted customers who shell out $70 to $100 a month for service. Young consumers, in particular, do not seem to share their parents' affinity for their pricey cable and satellite TV packages, and are increasingly drawn to the Internet and to services such as Netflix and Hulu for entertainment.

If the cable industry is looking for help from the Federal Communications Commission in its fights with broadcasters, it should think again. Top advisors to the FCC's chairman and three commissioners, speaking at the National Cable & Telecommunications Assn.'s convention in Los Angeles on Wednesday, indicated that their bosses have little inclination to start regulating the disputes over the fees broadcasters want from cable operators to carry the broadcasters' channels. Over the last several months there has been a handful of high-profile fights between broadcasters and cable operators, including Fox and Time Warner Cable and more recently ABC and Cablevison Systems, the latter of which saw ABC temporarily cut its signal, causing New Yorkers to miss a portion of the Academy Awards telecast until a deal was reached.

Last fall, Apple Inc.'s head of Internet services began making the Hollywood rounds with a proposal to launch a subscription television service that would offer a package of broadcast shows for $10 a month. The service was intended as a dazzling new entertainment feature to spark sales of Apple's soon-to-be-launched iPad. But the plan fizzled when several of the biggest studios rejected the concept out of hand. They also dismissed Apple's comeback pitch: to charge 99 cents per TV episode.

The nation's biggest cable operator can now get bigger. The U.S. Court of Appeals for the District of Columbia Circuit sided with Comcast Corp. and against the Federal Communications Commission on Friday in a closely watched case over how many of the nation's roughly 100 million cable TV subscribers one company should be allowed to serve. In throwing out the FCC's rules that no cable company can serve more than 30% of the nation's TV marketplace, the court said the regulatory agency did not factor in competition in the form of satellite television in its arguments for why the industry should not be allowed to expand.

There is just enough competition in the cable and fiber-optic TV market now to get prices down. ("Let's pay only for the TV we watch," Nov. 12.) It started for me when a friend called Time Warner and said she was going to cancel because there was nothing she wanted to watch. They offered to cut her bill by $20 and then $40. She stayed on. A couple of months ago, I got a brochure for AT&T U-verse TV, and it seemed like a better deal than Time Warner Cable. So I arranged for installation and then called Time Warner to cancel.

Cable TV rates keep rising, and federal regulators said last week they're investigating -- again -- whether cable companies are gouging consumers. Why bother? We're squandering limited regulatory resources policing an industry that's stubbornly clinging to an outdated business model (which, as a newspaperman, I know a little something about). It's time for the $79-billion cable industry to switch to a la carte pricing that would allow customers to pay only for the channels they want to watch.

Bill Daniels, a cable television and sports programming pioneer, died Tuesday afternoon in Rancho Mirage after a long illness. He was 79. Daniels, who was considered the father of the cable industry, died at Eisenhower Medical Center. Although his primary residence was in Colorado--home to his cable brokerage company, Daniels & Associates--he had spent most of his time in recent years at his property in Del Mar, Calif.

Cox Cable San Diego recently announced a $2 increase in its monthly price for basic cable television service--from $17.95 to $19.95--a jump of more than 11%. For the angry subscriber whose yearly cable bill costs about as much as a television set, unfortunately, there is no recourse. The only thing TV viewers can do is go back to an antenna. Cable operators are, for the most part, local monopolists, free from effective competition, yet unhindered by public regulation.

The cable TV industry is free from new government regulations -- for now. An attempt by the head of the Federal Communications Commission to gain new regulatory powers over the industry failed Tuesday in the face of furious lobbying by cable firms, a backlash from Republican commissioners and lawmakers and accusations of underhandedness by one of the agency's Democrats. But Time Warner Cable Inc., Comcast Corp. and other cable companies aren't off the hook yet. FCC Chairman Kevin J.

California cities and counties would be stripped of most of their power to regulate local cable television operators as part of a compromise that emerged Tuesday in a high-stakes legislative battle over local television service. The plan would allow cable TV operators to be regulated statewide by the California Public Utilities Commission.