“If this [telecommu-nications] bill is a blueprint, it’s written in washable ink. Congress is putting out a picture of how things will evolve. But technology is transforming the industry in ways that we don’t yet understand.”
MARK ROTENBERG, ELECTRONIC PRIVACY INFORMATION CENTER, 1996
Between 1984 and 1996, lawmakers went back and forth on cable rates and rules, creating a number of cable acts. One Congress would try to end must-carry rules or abandon rate regulation, and then a later one would restore the rules. Congress finally rewrote the nation’s communications laws in the Telecommunications Act of 1996, bringing cable fully under the federal rules that had long governed the telephone, radio, and TV industries. In its most significant move, Congress used the Telecommunications Act to knock down regulatory barriers, allowing regional phone companies, long-distance carriers, and cable companies to enter one another’s markets. The act allows cable companies to offer telephone services, and it permits phone companies to offer Internet services and buy or construct cable systems in communities with fewer than fifty thousand residents. For the first time, owners could operate TV or radio stations in the same market where they owned a cable system. Congress hoped that the new rules would spur competition and lower both phone and cable rates, but this has not usually happened. Instead, cable and phone companies have merged operations in many markets, keeping prices at a premium and competition to a minimum.
The 1996 act has had a mixed impact on cable customers. Cable companies argued that it would lead to more competition and innovations in programming, services, and technology. But in fact, there is not extensive competition in cable. About 90 percent of communities in the United States still have only one local cable company. In these areas, cable rates have risen faster, and in communities with multiple cable providers the competition makes a difference—monthly rates are an average of 10 percent lower, according to one FCC study.19 The rise of DBS companies like DISH in the last few years has also made cable prices more competitive.
Still, the cable industry has delivered on some of its technology promises, investing nearly $150 billion in technological infrastructure between 1996 and 2009—mostly installing high-speed fiber-optic wires to carry TV and phone services. This has enabled cable companies to offer what they call the “triple play”—or bundling digital cable television, broadband Internet, and telephone service. By 2013, U.S. cable companies had signed more than forty-six million households to digital programming packages, while almost fifty million households had high-speed cable Internet service and twenty-six million households received their telephone service from cable companies.20