Good afternoon Chairman Zecker and members of the Assembly Telecommunications & Utilities Committee. I am the legislative liaison with the Division of the Ratepayer Advocate. I’m here today on behalf of Blossom A. Peretz, the Ratepayer Advocate, who regrets not being able to personally address the committee.

It’s no secret in New Jersey that cable rates are soaring. It is also no secret why. Cable television companies currently do not operate in a competitive marketplace in our state.

Although formally deregulated by the federal government in 1992, cable television companies still have virtual monopolies in most communities in New Jersey, and the rest of the country as well. In addition, as of March 31, 1999, the cable programming service tier, the tier above basic service, is not regulated at all. Since that date, rates for higher tiers of cable service have forced many subscribers to go back to basic service.

Certainly, it was not Congress’ intent to reduce choice by deregulating cable. However, the ongoing deregulation of monopoly cable providers has this precise effect because it limits customers’ financial ability to receive cable services.

Basic economics tells us that competitive market forces generally result in declining costs. Where head-to-head competition exists across the country, cable television rates have gone down.

However, since market forces alone have not led us to competition, we believe federal re-regulation is the road back to a truly affordable marketplace.

While rates for basic cable service remain regulated by the Board of Public Utilities, the Board is held bound by federal law which severely limits its ability to prevent increases for other services. The rates for the two additional service tiers -- cable service programming and the premium or pay-per-view movie channels -- are currently deregulated. We all recognize that the rates for these tiers have skyrocketed with no end in sight.

The Ratepayer Advocate supports bill, AR-92. Congress needs to revisit the issue of regulation and give states the power to fully regulate the cable industry. We need to reverse the trend of cable rates rising out of control. We need to establish a system which offers lower cable rates and improved cable television service for all of New Jersey’s consumers.

Thank you.

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