Stations Balk at Competition-Rule Change

WASHINGTON — The National Association of Broadcasters is bunking down with a strange bedfellow to try to slow the Federal Communications Commission’s proceeding on turning its effective competition test around to assume cable service is competitive unless proved otherwise.

One of the new provisions in the new satellite reauthorization bill that passed in the last Congress was a mandate that the FCC take a new look at the old rules, which have held that cable operators’ basic rates can be regulated by local franchising authorities unless those providers can meet a multipart test proving there is “effective competition”in the local market.

Broadcasters hammered on cable rates throughout the satellite-bill reauthorization process as a counter to cable’s efforts to remake the rules governing retransmission consent for broadcasters’ stations.

The FCC has proposed turning that presumption around, since almost all cable-operator petitions to deregulate rates are granted given, for one, the availability of national satellite-TV providers Dish Network and DirecTV.

The “effective competition” rule regards traditional video, not the broadband service that the FCC continues to argue is not competitive and needs regulation, most recently through its reclassification as a commoncarrier telecom service under Title II.

Enter the National Association of Broadcasters and frequent cable critic Public Knowledge, who want the FCC to narrow its finding to smaller operators or extend the initial and reply comment deadlines on the proposal (from April 9 and 20, respectively to May 11 and 26). They also take issue with reversing the presumption.

The NAB and Washington, D.C.-based advocacy group PK have argued that the the satellite bill’s language made clear that legislators were talking about applying a streamlined effective-competition petition process for smaller operators, not the FCC’s wide-ranging proposal to start assuming there is competition. Such an assumption could have a “seismic impact on consumers throughout the country,” they said.

The NAB, in concert with PK, wants the FCC to narrow its decision to smaller operators. If not, it wants the agency to collect more information on how presuming competition would affect underserved communities if rates go “unchecked,” and how shifting the burden of proof might impact “MVPD subscribers, other television viewers, advertisers, distribution of broadcast signals, and distribution of public, educational and governmental [PEG] access channels.”

So far, cable operators have already been making a pretty good case for deregulating rates even without the presumption in their favor.

The FCC’s Notice of Proposed Rulemaking pointed out that in the past two years, only eight of the 228 petitions for effective competition submitted were challenged by local authorities, none were denied, and 224 of the 228 were granted in full.

The American Cable Association, which represents the smaller operators the NAB and PK want the FCC to focus on, oppose the move, calling it an extraordinary and disruptive motion.

“It’s disappointing that the National Association of Broadcasters is trying to thwart the FCC from relieving the independent cable community from unnecessary costs and burdens as Congress clearly intended,” ACA president Matt Polka said.

Whatever the FCC does, it has to do it soon. The bill gave the FCC a June 2 deadline for action.

John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.