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AHGA Home
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February 12, 2007
The Honorable John
Dingell
U.S. House of Representatives
2328 Rayburn HOB
Washington, DC 20515-2215
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The Honorable Joe
Barton
U.S. House of Representatives
2109 Rayburn HOB
Washington, DC 20515-4306 |
The Honorable Edward
Markey
U.S. House of Representatives
2108 Rayburn HOB
Washington, DC 20515-2107 |
The Honorable Fred
Upton
U.S. House of Representatives
2183 Rayburn HOB
Washington, DC 20515-2206 |
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Dear Representatives:
On behalf of the nation’s 75 million American homeowners, The American
Homeowners Grassroots Alliance (AHGA) writes to thank Energy and
Commerce Committee’s leadership for introducing during last week’s
Consumer Protection Week major bipartisan legislation on privacy issues
dealing with pretexting, spyware, Social Security number protection, and
data security. We also applaud the committee’s efforts to address
challenges related to media ownership, the digital television
transition, and the e-rate program. These are major policy issues with
significant impact on the nation’s homeowners, and we support speedy
action on these important proposals in the Committee and in Congress.
At the same time we want to express our concerns regarding another
policy area where progress to help consumers has been slow and
exasperating. That is the continually rising cable TV rates across
America and the persistent poor quality of cable TV services. In total,
more than 100 million homes in this country have a television, nearly
70% of which subscribe to cable. The quality of cable TV services
remains among the poorest of services according to consumer surveys
conducted by J.D. Powers. Over the past decade, cable rates have risen
more than 86% across the country. State and local governments have had
the power to address these serious problems but clearly many have done
an inadequate job of protecting the interests of their constituents.
Fortunately that is changing. Across the country state and local
governments, with widespread support of consumers, have taken steps that
are reducing the substantial costs of TV services and creating powerful
incentives to improve TV services quality. State legislatures are
passing legislation that speeds what has been a painfully slow process
of bringing competition into the TV services arena. The state
legislation has also included substantial important protections for
consumers, including assuring that there is no discrimination in the
availability of the new services, creating an important role for
municipalities to address consumer complaints, requiring continued
support for public educational and governmental access, and providing
strong enforcement tools. While some have criticized caps on the limits
on local franchise fees, inevitably most of those fees must be passed on
to local subscribers. Any limits imposed on this form of indirect
taxation do not preclude local governments from funding very important
basic (but mostly unrelated) municipal services by using the more
desirable transparent method of direct taxation.
There is broad bipartisan public and political support for increasing
competition in cable TV services. Last year in California, the
democratic state legislature passed TV services competition legislation
by an overwhelming margin and it was signed into law by the state’s
republican governor. On the opposite coast, in our home state of
Virginia, TV services competition legislation was also passed by an
overwhelming margin by a republican state legislature and it was signed
into law by the our democratic governor. More local governments, both
democrat and republican, are beginning to allow competition in TV
services as well.
These initiatives are having the intended effect. According to the
Government Accountability Office, where cable TV faces wire line
competition, prices are 15.7% lower. In one early 2006 pre and post
competition multi city study, the monthly weighted average TV services
prices dropped from about $60 monthly to $40 monthly. Those savings
amount to $240 a year, a substantial amount for most homeowners and
other consumers.
There are other very important and positive implications of expanded
cable TV services competition as well. Many new TV services competitors
bring their TV services into the home via fiber optic cable, which can
also provide the fastest noncommercial Internet access speeds. Faster
Internet access is essential to accelerating the trend of American
homeowners returning to a home-centric lifestyle. It enables growing use
of teleworking, which helps reduce vehicle usage and its undesirable
downsides, including global warming and rush hour traffic. It also
encourages the creation of home-based businesses, which are rapidly
increasing – some 10 million individuals earn a part time or full time
living as eBay sellers. New wearable wireless medical monitoring devices
now under development will also allow many of the nation’s 7 million
chronically ill and many seniors with medical challenges to remain in
their homes while their health can be monitored remotely 24/7 via
computer modems. Fewer will be forced to move into expensive health care
facilities, reducing the spiraling increases in health care costs and
its effects on homeowners, consumers, and governments at all levels.
Very fast broadband access is essential to most of these developments.
Despite the growing public support, much more needs to be done. Only two
percent of zip codes currently have significant wire line competition to
cable. This is a serious problem – a problem with real consequences in
the form of continuing cable TV services price increases and poor
quality of service. American homeowners deserve better.
For this reason we appreciate the Federal Communications Commission’s
recent move in imposing reasonable timetables on the local franchise
review and approval process. Apart from questions regarding the
authority of the FCC to issue those rules, the FCC’s effort to reform
the current undesirable status quo clearly reflects the will of the
majority of American consumers. The rules to not prevent state and local
governments from addressing the many important concerns of consumers in
the franchise process. These include discrimination in new services, the
role of municipalities in addressing consumer complaints, continuing
support for public educational and governmental access, and provision of
strong enforcement tools. The substantial consumer cost savings and
other important desirable attendant benefits from more competition in
this largely monopolistic industry more than offset any modest
restrictions of current local franchise procedures that may result.
There is another important policy area that we suggest the Committee
investigate. That is the area of vendor barriers to Internet commerce.
Many powerful Internet companies are acting in a monopolistic manor to
limit the choices of American consumers. For example today 80% of home
buyers use the Internet in home searches. The Justice Department’s
Antitrust Division last year sued the National Association of Realtors
over the industry’s rules governing home buyers Internet access to
discount real estate brokers’ listings. DoJ’s efforts in this area, as
well as DoJ’s and the Federal Trade Commission’s efforts to stop similar
efforts to restrict consumer Internet access to real estate listings at
the state level, are greatly appreciated by our organization and other
consumer organizations such as the Consumer Federation of America.
AHGA appreciates your thoughtful consideration of what Americans truly
need in the telecommunications marketplace today. By pursuing an
aggressive pro-consumer agenda, including support of more competition in
TV services, the many worthy initiatives already announced by the
committee and its leaders, and additional problem areas that may be
identified (such as vendor barriers to Internet commerce), the Energy
and Commerce Committee will be providing greater protection of consumer
privacy and other consumer rights.
Sincerely,
Bruce N. Hahn
President
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