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Hill Heats Up Over Effective-Competition Presumption

Congress continues to weigh in on the Federal Communications Commission's proposal to presume cable operators are subject to competition absent a showing to the contrary. Currently, the presumption is that a local market is not competitive.

A finding of effective competition by the FCC relieves operators of local basic-cable rate regulation.

The latest salvos came from both sides of the aisle and the issue as the FCC is expected any day now to circulate an order on the proposal.

In a letter dated Wednesday (May 13), Rep. Anna Eshoo (D-Calif.), ranking member of the House Energy & Commerce Committee's Communication Subcommittee, joined with Rep. Steve Scalise (R-La.) to support the FCC's proposal to "update" the effective competition provision.

They pointed to legacy regulation as an impediment to enhanced flexibility and choice -- the presumption comes from the1992 Cable Act, which dates from a time when cable ops had a 95% MVPD market share, which is now down to a tad more than 50%.

Eshoo and Scalist also cited the time-consuming and costly requirement of the effective-competition provision and said it makes cable ops engage in long and costly proceedings to offer more flexible packaging options to consumers.

They also said saving FCC resources would be saving taxpayer dollars.

On the other side, Rep. Frank Pallone (D-N.J.), ranking member of the House Energy & Commerce Committee, in a letter also dated May 13, asked FCC chairman Tom Wheeler to think hard about the impact of reversing the presumption, pointing to a New Jersey franchising authority's concerns and the impact of the move on consumers.

Pallone said the FCC could simply streamline the petition process and leave the larger question about reversing the presumption for another day, basically inviting Wheeler to punt on the proposed reversal.

The FCC is under an early June congressional deadline to produce an order streamlining the process for smaller cable operators. It was that order the chairman proposed to use to streamline it for all operators by reversing the presumption.