Skip to main content

FCC Denies First Challenge to Cable Competition Presumption

The FCC Wednesday rejected the first request it received from a local franchising authority (LFA) attempting to rebut the new presumption that cable operators are subject to effective competition for traditional video service and, thus, not subject to basic cable rate regulation.

The deadline for trying to retain basic rate regulation authority before the presumption reversal changed the equation was Dec. 8, though LFAs can file to reinstate rate regs going forward.

The Campbell County (Ky.) Cable Board asked the FCC Nov. 17 to certify it as a rate regulator, but failed to refute or rebut the presumption that Time Warner Cable was subject to competition.

The decision does not give cable operators much guidance on what might convince the FCC that cable ops were not subject to competition given that the only evidence, and the FCC called that no evidence, was a 2014 letter in which TWC asked whether it made sense to regulate its rates. The city suggested that TWC's outreach even though the FCC had determined that four other nearby communities were subject to effective competition was not somehow a concession that they could be regulated.

The FCC went further, saying that even had TWC's letter been a concession, it would still need evidence to rebut the FCC's presumption that TWC was subject to effective competition.

The FCC has routinely granted hundreds of cable operators requests for effective competition determinations, primarily because satellite is a pretty ubiquitous competitor in all but a handful of markets.

It was not clear at press time how many such new presumption-rebutting requests it had gotten from LFAs.

The FCC in June, in a 3-2 vote (Democrats Jessica Rosenworcel and Mignon Clyburn dissented), reversed the presumption of "not competitive" following a mandate from Congress to review the effective competition regime to make it easier on smaller cable operators.

The FCC majority concluded it was time to make it easier for all operators, not just small businesses, and voted to reverse the presumption and assume cable operators face competition for traditional video in their local markets unless a franchise authority or other party can demonstrate otherwise.

The decision reduces paperwork for cable ops, but as a practical matter does not change the landscape dramatically since the FCC has granted virtually all such requests by cable operators in recent years.

Nonetheless, the FCC decision to reverse the presumption has been taken to court by the National Association of Telecommunications Officers and Advisors, which represents LFAs, as well as the National Association of Broadcasters.

NAB told the court that in markets deemed to be competitive, "cable operators are likely to deny any obligation to carry broadcasters who have negotiated retransmission consent agreements on the basic service tier that must be offered to every subscriber." Cable operators have pointed out that has not happened in the hundreds of markets deemed to be competitive in recent years.