The FCC vote ends a 20-year period during which local officials had the right — which they rarely used — to regulate cable rates. The Commission determined that the vast majority of operators face “effective competition” from satellite and telco companies. The new “rebuttable presumption” strips local officials of the right from the 1992 Cable Television Consumer Protection and Competition Act to regulate prices where there’s insufficient competition — although they can challenge the FCC’s presumption.
The Commission says that it has the flexibility to make a change, and was urged to review the matter in a 2014 law governing satellite companies. It directed the FCC to streamline its rules for small cable operators.
Since the 1992 Cable Act, “competition in the video marketplace has increased dramatically,” Chairman Tom Wheeler says. “Direct broadcast satellite (DBS) providers, like DirecTV and Dish Network, now have a ubiquitous nationwide presence providing competition in virtually all markets. This is in addition to the competition increasingly being provided by other pay -TV providers. It should, therefore, come as no surprise that the Commission found, in almost all cases, that Effective Competition did exist and that most cable operators who petitioned the FCC met the statutory test.”
The National Cable & Telecommunications Association told the FCC last month that in every TV market at least 15% of pay TV customers subscribe to a non cable service.
Wheeler’s fellow Democrats on the Commission issued partial dissents, saying that the FCC went too far by making a change that affects large and small operators alike. That “raises significant questions as to the possibility of unintended consequences” including big rate hikes, Mignon Clyburn says. Jessica Rosenworcel adds that a ruling that “inexplicably races past this straightforward statutory directive” to help small cable “provides no clear benefit to consumers.”
The National Association of Broadcasters also objected. It’s “disappointing and surprising that as cable customer satisfaction ratings plunge to a record low, the FCC believes it is wise to gut the one protection that allows local municipalities a chance to protect consumers from abusive treatment and consistently skyrocketing rates.” spokesman Dennis Wharton says.
But the FCC’s Republican members applauded the change. “We can’t keep living in the past,” Ajit Pai said, further urging the Commission to “continue to modernize our media rules.” Michael O’Rielly says that the FCC “should have done this long ago.”