Regulation, shmegulation

To a journalist, there are few things more frustrating than realizing you have unknowingly passed along misleading information.

For years, I've told readers that the Telecommunications Act of 1996 deregulated cable-TV prices, with one exception: the price of limited-basic service and of the equipment needed to watch it. Those are still regulated by local franchise authorities, I've repeated each time the subject came up.

But what does that mean? Last month, while researching a column on the question of why Comcast requires its Philadelphia customers to rent a converter box – and why it could raise the price tag for a converter by about 20 percent in one year – I discovered the answer: less than you might think. (To read last week's column, click here.)

City officials say Comcast fills out Federal Communications Commission forms and uses FCC formulas to compute a "maximum allowable price" for each regulated service. As long as it comes in beneath that price, all the city can do is nod approvingly. Moreover, Comcast isn't just allowed to recover the costs of these devices that it says we must have to protect the security of its cable signal. It's guaranteed a profit on its investment in them.

Does any outsider examine a cable franchisee's computations? The city doesn't – it doesn't have the expertise, city officials say. Nor, as far as I can tell, does the FCC.

So how would anybody, anywhere, know whether a cable company was cooking its books? They wouldn't.

Stay tuned. I'm still trying to figure out why Comcast's maximum allowable price for converters could change so dramatically from one year to the next. City residents who subscribe to Comcast's standard "expanded-basic" service tier now pay almost $5 a month for a converter and remote.

I'll let you know what I find.