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Seldom do I feel compelled to take issue with the editorials on the preceding page, but the Post's recent praise of the cable-TV industry has upset my delicate digestive system. There's more to the story than the admirable news-gathering prowess of CNN or how C-SPAN shows representative democracy at work.
In 1955, the average monthly cable bill was $5. Proceed 29 years to 1984. Business inflation, as measured by the Producer Price Index, was 287 percent over those years, so the $5 monthly cable bill should have risen to $14.35.
But it didn't. In 1984, the average monthly cable bill was $9.20, not $14.35. There were economies of scale as the industry grew, as well as technological advances like satellite transmission.
Those helped keep rates down, but the major factor was that cable rates were set by local governments. Typically, a cable company, like other utilities, received a franchise from a city in order to use public property -- streets and alleys -- to string its lines.
The municipal government, as grantor of the monopoly franchise, set the rates, just as the Colorado Public Utilities Commission granted a monopoly to Mountain Bell and regulated its rates.
Since the people on the town board or city council were also customers of the cable company, they knew first-hand what kind of service the town got. Further, local governments are very accessible to citizens with complaints.
When the cable company wanted a rate increase, it had to undergo a spirited inquisition. This not only discouraged rate increases, but I fondly recall how it enlivened many otherwise tedious meetings of the Kremmling Board of Trustees and the Salida City Council.
But in 1984, Congress took that power away from local governments. The average monthly cable rate, which went from $5 to $9.20 in 29 years, soared to $16.94 in only six years, and it's still rising; the projected 1995 bill is $24.88.
Some of that unregulated monopoly profit goes into better service and more channels. Some of it goes to Denver's cable barons, so that we can read of their soirees on the society pages. And some of it goes to our Sen. Tim Wirth, the cable industry's best friend -- he was a major mover on the 1984 deregulation bill when he was in the House.
Wirth may complain about PACs and special interests, but he did attend a cable industry reception last April 23 at the Ritz-Carlton Hotel in Washington. His 1992 campaign fund emerged more than $80,000 richer -- $40,000 of it came from eight cable PACs, and individuals in the industry donated another $42,500.
You probably didn't see that on C-SPAN or CNN.
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