Keep up with the latest developments and legal issues in the telecommunications and emerging technology sectors, with exclusive access to a comprehensive collection of telecommunications law news,...
By Lydia Beyoud
March 16 — The Federal Communications Commission is proposing to go well beyond a congressional directive to streamline any finding that effective competition exists in a small cable provider's service area by putting the burden to prove competition doesn't exist on the shoulders of local and state franchise authorities.
The move would benefit small cable providers, as well as the entire cable marketplace, according to a notice of proposed rulemaking (NPRM).
In the March 16 NPRM, the FCC sought comment on reversing its regulatory status quo by adopting a rebuttable presumption that competition exists in the cable marketplace, thereby requiring a state or local franchising authority to show that competition doesn't exist in order to regulate basic cable rates.
The proposed rule is part of the FCC's effort to implement §111 of the STELA Reauthorization Act of 2014, which directs the agency to streamline the effective competition petition process for small cable operators. The proposed rule wouldn't simply reduce the amount of paperwork and compliance costs small and large cable operators face but could decrease regulatory costs for the FCC as well, a cable industry attorney, speaking on background, told Bloomberg BNA.
The 1992 Cable Act required cable operators to prove that sufficient competition exists in their service areas in order to avoid having their basic-tier cable rates and equipment regulated by local, state or federal franchise authorities.
With the significant growth of competing direct broadcast satellite providers such as Dish Network Corp. and DirecTV, and the approval since early 2013 of more than 99.5 percent of effective-competition requests, the FCC said the current state of competition in the multichannel video programming distributor (MVPD) marketplace supports the proposed rebuttable presumption.
Nearly 26 percent of U.S. households in 2013 subscribed to a satellite TV service, according to Dish and DirecTV financial reports. From the start of 2013 to the present, the FCC's Media Bureau granted in their entirety 224 petitions requesting findings of effective competition and granted four such petitions in part; the Commission did not deny any such requests in their entirety, the FCC said.
The STELAR Act was signed on Dec. 4, ensuring that about 1.5 million Americans would continue to receive satellite broadcast signals for the next five years, while also making some major changes to the MVPD marketplace.
The FCC sought comments on whether adopting rebuttable presumption of effective marketplace competition would fulfill the requirements of §111 of STELAR or whether it would require additional statutory authority to change its current presumption.
“We note that, if this provision were read to restrict the Commission from changing the presumption for small operators, it could have the perverse effect of permitting the Commission, consistent with market realities, to reduce burdens on larger operators but not on smaller ones,” the FCC said.
The NPRM also asked if adopting a presumption of competing-provider effective competition would be consistent with the current state of the market.
“The market changes since the adoption of the original presumption do not appear to support a presumption that any of the other effective competition tests (low penetration, municipal provider, or [local exchange carrier]) are met,” the FCC said, asking for comment on the accuracy of that observation.
The commission specifically sought input on whether changing the marketplace competition presumption would pass the two prongs of the competing provider test.
The first prong asks whether the FCC should presume that the ubiquitous nationwide presence of Dish Network and DirecTV satisfies the requirement that a franchise area be served by two unaffiliated MVPDs offering comparable programming to at least 50 percent of the households in the area.
The commission noted that it has never found that the presence of either satellite TV company failed to satisfy this first prong.
The second prong asks whether the FCC should presume that MVPDs other than the largest MVPD have captured more than 15 percent of the households in the franchise area. On a nationwide basis, competitors to incumbent cable operators have captured about 34 percent of U.S. households, or more than twice the 15 percent threshold needed to satisfy the second prong of the competing provider test, the FCC said.
To contact the reporter on this story: Lydia Beyoud in Washington at email@example.com
To contact the editor responsible for this story: Sheldon B. Richman at firstname.lastname@example.org
Text of the FCC's notice of proposed rulemaking is available at http://transition.fcc.gov/Daily_Releases/Daily_Business/2015/db0316/FCC-15-30A1.pdf.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)