The Honorable Patrick Leahy

United States Senator
Vermont
October 19, 2005

Statement of Senator Patrick Leahy
Hearing Before the Subcommittee on Antitrust, Business Rights, and Competition:
"Video Competition in 2005 - More Consolidation, or New Choices for Consumers?"
October 19, 2005

I want to thank both Senators DeWine and Kohl for holding this hearing today on an issue that is important to the people of Vermont and indeed to consumers across the country. Subscription video services have become a vital component of America's information infrastructure and for that reason it is long been my goal, to create laws that promote genuine competition, real improvements in service, and better consumer choices in video programming services. Creating laws that meet these goals, result in better prices, more options, and improved service for consumers. Living in the Digital Age, today's consumers should have more choices than ever for video programming services. Unfortunately, in most areas of the United States, this is not the case.

Over the last several years we have made some significant progress towards providing better cable and satellite services for consumers. For example, the most recent FCC report on video competition largely credits the "Satellite Home Viewer Improvement Act of 1999," on which Senator Hatch and I worked closely, with the steady increase in the number of markets where local broadcast television stations are distributed by Digital Broadcast Satellite. I mention this because it means that consumers in even in the most rural and remote areas of the country, like Vermont, are being provided with more options in their video programming services. This is an important step toward real improvement, but, we must not stop there. There is much more to be done.

Two weeks ago, Vermonters held a town meeting with officials from the Comcast Corporation to discuss the Adelphia buyout by Comcast and Time Warner. At that meeting, several people expressed legitimate concerns over the proposed acquisition and the effect it will have on already exceedingly high cable rates. They were also worried about rural access to cable and broadband Internet connections that are needed in much of the state, and the prospects for survival of local cable channel access stations that provide local and regional programs essential to many small Vermont communities. Certainly these concerns are not limited to the small group of people who attended a Vermont town meeting, but rather, reflect the broader concerns of Vermonters and many Americans.

Comcast and Time Warner are the two largest cable companies in the country and currently control almost half the cable market nationwide. I fear that if they are permitted to acquire Adelphia the result will be a major step back from real and meaningful competition in the marketplace. Consumers are right to question to the future of service rates, programming content, and ability to pay for only those services they want. If past experience is a useful predictor of future outcomes we should be weary of heavy consolidation in the cable market.

When Congress passed the Telecommunications Act of 1996, I was one of five Senators to vote against the bill. I expressed reservations at the time that the competition predicted by many would fail to materialize. I wish my fears had not proved correct, however, since the Act was signed into law the anticipated competition to drive down rates has come to fruition.

As we move forward and begin to discuss the best ways to reform the 1996 Telecommunications Act, it is my hope that we do not forget the painful lessons of the last nine years. Ever-tightening bonds between corporate control of content and of distribution are having an anticompetitive effect on what consumers can see on their screens, and likely on how much they have to pay for it. This has been, and continues to be, an area of great concern to me and one that I hope our witnesses will address.

I am committed to exploring a variety of solutions that would allow Vermonters and all Americans to enjoy the benefits of greater competition in the cable and broadband industries. I know that other members of this Committee also share that commitment. I look forward to working with them in order to sort through these complex issues.