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Mass Communications Law - Cable Television

act service companies regulation

Cable television has grown tremendously since the 1980s. By 1996, it was available to more than 96 percent of U.S. homes, and 60 percent were subscribers to cable. Cable originally served communities in mountainous regions that had difficulty receiving broadcast transmissions. Many communities solved this problem by erecting tall receiving towers at the highest point in the area to capture broadcast signals and retransmit them over wires running from the tower to various homes that subscribed to this service. This service is called community antenna television system, popularly known as CATV, or cable television.

During the 1970s and 1980s, large corporations installed cable systems in every large metropolitan area in the United States, as well as in rural areas. Independent programming was transmitted on cable systems by companies such as Home Box Office (HBO) and Cable News Network (CNN).

The FCC adopted the first general federal regulation of cable systems, although cable television could not be categorized as broadcasting in the traditional sense. Local government also became involved because each municipality had to award a cable system franchise to one vendor. Cable operators negotiated system requirements and pricing with local governments. Concerns about rate regulation led Congress to enact the Cable Television Consumer Protection and Competition Act of 1992, Pub. L. No. 102-385, 106 Stat. 1460. The act gave the FCC greater control of the cable television industry, mandated improved customer service, and sought to improve the competitive position of broadcast stations. It also set rate structures to control the price of cable subscriptions. However, the Telecommunications Act of 1996 reversed the 1992 act by ending all rate regulation. This meant that cable operators were free to charge what they wished.

Congress deregulated cable television rates in part because of increased interest by telephone companies to enter the cable market by sending programming through existing phone lines. The 1996 act permits phone companies to provide video programming directly to subscribers in their service areas. Congress believed that competition between phone companies and cable operators would improve service and hold down subscription rates.

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