FCC Lightens Burden of Proof for Cable

The FCC had another 3-2 vote this week. However, unlike most other such votes in recent years, the split found Chairman Tom Wheeler siding with the Commission’s two Republicans against his fellow Democrats.  At issue was the agency’s decision on how to implement a provision in last year’s STELA Reauthorization Act that required the FCC “to establish a streamlined process for filing of an effective competition petition… for small cable operators, particularly those who serve primarily rural areas.”  The majority of the Commissioners decided to lift the burden for all cable operators, small and large, by ruling that they all faced “effective competition,” unless proved otherwise by a local franchising authority that wants to regulate basic tier cable rates. 

In his statement accompanying the decision, Chairman Wheeler noted that in almost all cases (99.5 percent) evaluated by the Commission, the congressional definition of “effective competition” was found to be met.  He stated, “Significantly, our most recent report on cable industry prices concludes that the average rate for basic service is lower in communities with a finding of Effective Competition than in those without such a finding.  This is not surprising since competitive choice is the most efficient market regulator.”  He also asserted that the FCC’s effective competition findings had not affected cable tier placement of local broadcast stations.

However, Commissioner Jessica Rosenworcel was of a different mind.  She stated this ruling “inexplicably races past” the letter of the law and “provides all cable operators—from the biggest to the smallest—with an expedited process to avoid oversight.”  She added, “This is contrary to what Congress asked us to do, at odds with the recommendation of the Commission’s own Intergovernmental Advisory Committee, and provides no clear benefit to consumers.”

  • Find the FCC’s announcement of this rule change, with Commissioner reactions, here.

By Aaron Mercer, Vice President of Government Relations

Published: June 5, 2015

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