The Wall Street Journal is out with an interesting article today headlined “Cable Rate Increases Are Smallest in Years.”

No problem there. Cable companies are saying they plan to raise their rates at an ever-so-slight slower rate than they have in years past.

But we have some real problems with the story that follows – mainly that it is highly misleading, to put it charitably. And we have a bigger problem this same pretzel logic is now being used by the chairman of the Federal Communications Commission to justify a plan to neuter local authorities in cable franchise negotiations.

Here’s how the story written by WSJ reporter Sarmad Ali begins:

“For years consumers have enjoyed falling phone rates thanks to increasing competition in the telecommunications business. Now competition is beginning to have a similar effect on how much households pay for television service.”

With a beginning like that, one might reasonably expect a story on how new competition in the cable television business is driving down prices for consumers, right?

Not so much. Here’s the next paragraph, with the emphasis added by us.

“With telephone companies pushing into the TV business, rate increases planned by cable operators for 2007 are going to be the most moderate in years. Next year, for example, Comcast Corp., the country's largest cable operator by number of customers, will raise the cost of its most popular 75-channel analog package an average 4.5% – from about $41 a month to $43 – its lowest increase in more than a decade.”

Regular readers of Now Hear This will know that we have been blogging about the issue of spiraling cable rates quite a bit in recent days. Maybe we are being nitpickers, but we think a slightly smaller increase is still an increase – and a pretty big one at that.

Big phone companies such as Verizon and AT&T have been using this same tortured logic and fact-twisting to convince federal and state officials to allow them to begin offering cable television services in their communities without fundamental consumer protections that have applied to other subscription TV providers.

Ironically, Verizon just announced that it will be raising the rates for its recently-introduced FiOS cable television service by 7.6 percent.

Want to hear something even more ironic? The WSJ article mentions that fact, near the bottom of the piece.

Now the truly dangerous part of all this.

Federal Communications Commission Chairman Kevin Martin is using this same flawed argument to underpin a new push he is making to eliminate the ability of local governments to require basic consumer protections when phone companies ask to provide TV service. The proposal would handcuff local authorities in negotiating concessions by allowing phone companies to start offering TV service without those protections if they can't reach agreement with local communities within 90 days.

Broadcasting and Cable has the details of Martin’s plan in an article you can view here.

Martin outlined his plan in a speech at a telecom conference in Washington on Wednesday, which you can read here. Basically, Martin's plan is the same one the phone companies tried unsuccessfully to get through Congress this year.

We will leave it to you to read the speech and decide whether Chairman Martin thinks his job is about serving consumers and the public – or serving the phone companies.