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FCC Announces Boost to Regulated Cable Rates

Rate-regulated cable operators can boost prices by 2.09%, according to the FCC's latest inflation adjustment figure.

That is the fourth-highest quarterly adjustment in the past 19 quarters and up from the 1.42% bump for the comparable quarter last year.

Local franchise authorities can, but are not required to, regulate basic rates where there is a lack of effective competition.

The price (of the non-external cost portion of rates) is adjusted quarterly based on changes in the GNP price index published by the State Department's Bureau of Economic analysis. MVPDs are allowed to pass though external costs, like program price increases, but those can be reviewed by the local franchise authority (LFA), which is the one doing the rate regulating rather than the FCC.

A local franchising authority can regulate basic rates if it can demonstrate that an operator is not subject to effective competition. Based in part on the ubiquity of satellite service, the FCC has reversed the former presumption that cable operators were not subject to effective competition unless they could affirmatively demonstrate that they were.