Consumers left further behind the digital divide


FOR IMMEDIATE RELEASE
04/05/2006

Consumers Left Further Behind the Digital Divide
House Panel Vote: Low-Income, Rural Consumers Left Further Behind the Digital Divide;
Cable and Telcos Allowed to Put Toll Booths on the Internet

(Washington, DC) – Consumer groups decried action by a House panel today to report legislation eliminating basic consumer protections in cable services that will lead to higher cable prices, reduced service quality and fewer choices of competitive Internet-based telecommunications and video service providers.
The House Subcommittee on Telecommunications and the Internet reported the Communications Opportunity, Promotion and Enhancement Act, which allows telephone and cable companies to offer video services over broadband without meeting existing local consumer protection requirements, including commitments that the cable service be made available to all consumers throughout the community, regardless of income.
“The vote gives consumers frustrated with skyrocketing cable rates and lousy service more of the same, or worse,” said Jeannine Kenney, senior policy analyst for Consumers Union.
“This action virtually ensures that the low- and middle-income families who most need price relief will be the least likely to receive it,” Kenney said. “Worse, the legislation opens a wide door to rate hikes and service degradation for those consumers left behind.”
The legislation allows telephone companies to offer cable without any commitment to provide service to all consumers – a provision consumer groups say allows telephone companies to redline low- and middle-income families that cannot afford the costly package of cable, telephone and Internet services the telephone companies want to sell. And existing cable companies that operate in markets the telephone companies enter can backslide on their decades-long obligations to offer and upgrade their service to all consumers in the community and to charge everyone the same price. That allows cable companies to hike cable rates in unserved neighborhoods to subsidize the price breaks they’re offering in wealthier neighborhoods where the telephone company offers service.
Bill Allows Phone and Cable Companies to Block, Impair Access to Internet-based Competitors
The legislation also strips the FCC of its authority to establish rules to prevent telephone and cable companies who own broadband network from blocking or impairing consumer access to the Internet-based services offered by competitors.
“The Internet remains the last best hope for affordable, competitive telecommunications services, like Internet phone and IP video services,” said Mark Cooper, director of consumer research at Consumer Federation of America. “Rather than provide for strong and meaningful protections to ensure that giant cable and telecommunications companies don’t use their ownership to block those competitors, the bill actually makes it harder for the FCC to protect consumers. This bill means consumers can expect less, not more competition and innovation from the Internet-based companies.”
Bill Rolls Back Consumer Protections
The bill gives the Federal Communications Commission sole authority to set consumer protection standards that states and localities have traditionally set and enforced. The bill prohibits states and localities from establishing and enforcing stricter consumer service requirements.
“Consumers will have no one to turn to with their service and billing complaints,” said Ben Scott, policy director of Free Press, a public interest group focusing on telecommunications issues. “The average consumer will not call the FCC to complain that their cable company overcharged them. They’ll call City Hall, which will now be unable to offer them any relief.”
For more information go to www.HearUsNow.org, a Consumers Union web site dedicated to telecommunications issues.
Contact:
Jeannine Kenney, Consumers Union, 202-462-6262 x1118
Jennifer Fuson, Consumers Union, 202-462-6262 x1121
Mark Cooper, Consumer Federation of America, 301-384-2203
Ben Scott, Free Press, 301-801-5618 cell