Statement of Administration Policy: H.R. 5267 - Cable Television Consumer Protection and Competition Act of 1990

(House)
(Markey (D) Massachusetts and Rinaldo (R) New Jersey)

The Administration strongly opposes reregulation of the cable television industry. If H.R. 5267 were presented to the President in its current form, his senior advisers would recommend a veto.

The Administration opposes H.R. 5267 because it imposes a new regime of Federal regulation over the cable industry beyond that established in the Cable Act of 1984. Specifically, the Administration opposes provisions that would implement additional Federal regulation over cable rates. The Administration also opposes provisions that place restrictions on the ability of cable programmers to distribute their Droduct.

The Administration opposes Section 15 of H.R. 5267 that would restrict foreign ownership of U.S. cable systems. Such a restriction invites retaliation by other nations that could stifle the growing investment of U.S. firms in foreign cable systems and could hinder U.S. efforts to open foreign markets. These provisions would violate existing international obligations under the Organisation for Economic Cooperation and Development's (OECD) Code of Liberalization of Capital Movements and would undercut U.S. efforts in the OECD and the General Agreement on Tariffs and Trade.

In addition, Sections 4 and 5 of H.R. 5267 would require cable operators to carry the signals of certain television stations. This would be required regardless of whether the cable operator believes that the stations are appropriate for inclusion in its package of services, and regardless of whether such inclusion reflects the desires and tastes of cable subscribers. The Administration believes that these "must carry" requirements would raise most serious constitutional questions under the First Amendment by infringing upon the editorial discretion exercised by cable operators in their selection of programming.

Section 3 of H.R. 5267 also raises similar constitutional concerns by requiring cable operators to offer, as one of their service options, a prescribed "basic service tier" to which they may not add any video programming.

The Administration continues to believe that competition, rather than regulation, creates the most substantial benefits for consumers, and me greatest opportunities for American industry. Consistent with this principle, the Administration supports removing barriers to entry by new competitors into the video services marketplace. Congress 6hould consider removing the current legislative prohibitions on telephone company entry found in the 1984 Cable Act as an alternative to instituting a burdensome and unnecessary regulatory regime.