The U.S. Court of Appeals in D.C. today upheld a 2015 FCC ruling that all but eliminated local cable regulators’ ability to set rates.
The commission determined that the vast majority of operators face “effective competition” from satellite and telco companies. That so-called “rebuttable presumption” stripped local officials of the right from the 1992 Cable Television Consumer Protection and Competition Act to regulate prices where there’s insufficient competition.
They can regain the ability to set rates if they can show that there’s too little competition in their particular markets.
The National Association of Broadcasters and the National Association of Telecommunications Officers and Advisors challenged the FCC ruling.
They argued that the law empowers local officials to regulate rates unless an operator demonstrates that there’s meaningful competition in the market. The FCC, they said, went too far by using national data to shift the burden of proof.
But the Appeals Court found that the FCC “reasonably interpreted the Communications Act.” It also ruled that the FCC could justify its rule on the grounds that it would make the process more efficient.
NAB declined comment.
The judgment preserves a rare decision where then-FCC chairman Tom Wheeler sided with Republicans — and with the cable industry.
Since the 1992 Cable Act, “competition in the video marketplace has increased dramatically,” he said in 2015. “Direct broadcast satellite providers, like DirecTV and Dish Network, now have a ubiquitous nationwide presence providing competition in virtually all markets.”
His two fellow Democrats on FCC at the time issued partial dissents. They said that the commission went too far by making a change that affects large and small operators alike and could result in big rate hikes.
American Cable Association CEO Matthew Polka applauded the Appeals Court’s decision. “In today’s market, consumers have at least three choices for traditional pay-television service and can elect to subscribe to many online video services, like Netflix and Hulu,” he says. “There is no longer any good reason that cable operators should remain subject to burdensome rate regulation.”