May 24, 1994

CHAIRMAN HUNDT ADDRESSES NCTA CONVENTION

     FCC Chairman Reed Hundt addressed the National Cable Television Association convention
in New Orleans today.  Hundt greeted cable operators as "great entrepreneurs in American business
history" who "have built a coaxial cable network that... is an essential part of the information
highway."

     Hundt told attendees, "As far as I can tell, and I hope I'm not wrong, this industry is on the
verge of a new dawn.  It is going to enter new markets and create new markets and achieve new
heights of growth... I aim for this goal:  Your growth and your future should be determined by your
customers, your competitors and your creativity; not by regulators and courts."

     He noted that while disagreement's over the FCC's implementation of cable rate regulation
were considered in court, "even while the lawyers take the case up on appeal, we must continue to
consult and cooperate so as to move on to the most important issue.  The issue here is too important
to wait on.  Let me state it:  how should the going forward rules be expressed, clarified, refined, or
even changed to make sure that you can play your historically energetic role in the competitive that
is coming.  How can we make sure the Cable Act does not stand in the way of the benefits the
country will receive from your competitive zeal?"  

     Hundt told the industry that the way in which consumers react to the final effect of the Cable
Act depends on what the industry says and does.  "While you prepare for the changes mandated by
the law, let me say that even if the Court of Appeals will review the lawyers' arguments, but the real
judge and jury of the implementation of the Cable Act will be the American consumers.  From the
public's perspective, it doesn't matter if the Commission and the cable industry are contesting in the
court or are talking in conference rooms.  What matters from the public's perspective is the changes
in the bill and in the quality of service."

     With regard to specific issues, Hundt said, "I've had many discussions with industry leaders
about the so-called 2% productivity offset.  This is part of an outstanding Further Notice of Proposed
Rulemaking, and I cannot prejudge the record.  But let me point out that we didn't adopt any such
offset in our February decision.  I don't know of any reason to adopt it now.  This sort of offset is
generally found in the regulations of a utility, but cable is not a utility."

     In discussing the Commission's decision to do a cost study of the cable industry, Hundt
explained that while he had heard that some people saw this as a "tactic to permit a further reduction
of the competitive differential."  He stressed, "To anyone who has entertained this suspicion, let me
clearly and unequivocally disabuse you of that idea.  I know of no evidence to support a further
reduction of the competitive differential and we are not looking for such evidence."

     In closing, Hundt said that while the cable industry has the "unwelcome burden of
accommodating the intrusions of the Cable Act into your ongoing business plans, but you have the
strength, creativity and resilience to manage this change successfully.  You could say that the cable
industry has substantial, real, bankable, prospects for increasing gross and net revenues, multiplying
the number of services offered to customers, and seizing the leadership among businesses that will
build the information highway.  As you could assert that you are going to be one of the key leaders
of our economy as we enter the 21st century."
                                   - FCC -