Lawmakers mull proposal to regulate ‘Net service

Lawmakers in a suburban Washington, D.C., county may impose stiff penalties on cable television companies that do not quickly fix customer problems with their high-speed Internet access.

The legislation is one of the nation’s first attempts by a local government to regulate cable modem service.

The Montgomery County, Md., plan calls for cable companies to restore Internet service within 24 hours of an outage or be forced to give consumers significant rebates. It also allows the county to impose fines on cable companies for violations. The regulation does not impose penalties for problems with the quality or speed of a connection.

“No one should have to pay for a service that isn’t provided,” County Council member Marilyn Praisner said.

The County Council is scheduled to vote on the proposal July 27, but cable companies are trying to attach amendments that would weaken the legislation. They say lawmakers are exaggerating the number of customer complaints about cable modem service.

“It’s a regulation in search of a problem,” said Brian Edwards, a spokesman for Comcast.

Study

Independent directors likely to benefit boards

A study of 266 U.S. companies finds that corporate board reforms such as a greater number of independent directors can help to guard against fraud.

In a review published in last month’s Financial Analysts Journal, three professors examined the boards of 133 companies accused of fraud between 1978 and 2001, and an equal number that had not been. All the companies were of similar size and in the same industry.

The researchers sought to uncover statistically significant differences in board member independence, board size, frequency of board meetings and other differences between the two groups. They found that companies accused of fraud had a lower percentage of outside and independent directors, were less likely to have an audit committee and were more likely to have a compensation committee.

The professors were from Drexel University, Long Island University and the University of Delaware. The journal is published by CFA Institute, a nonprofit association that administers certified financial planning examinations and curriculum.