Broadcasters Association Sues FCC Over Cable Competition Rules

Under federal law, a city can regulate cable TV rates for its residents if there is not “effective competition” in that market — that is, if one cable operator dominated the TV landscape in that area. But the Federal Communications Commission recently revised its way of looking at things so that it now presumes that satellite providers offer effective competition for the cable industry. This change hasn’t gone over well with broadcasters, who have petitioned a federal appeals court to challenge the FCC.

Let’s go back to 1992, when Congress passed the Cable Television Consumer Protection and Competition Act. The law allows for cities — or any other body that authorizes local pay-TV franchises — to regulate cable TV rates if they can show that there is a lack of competition.

In the decades since, the FCC had granted rate regulation authority to various governments and agencies around the country who had been able to demonstrate that the local cable TV company was the only game in town.

Then in late 2014, when Congress reauthorized legislation that allows satellites to rebroadcast TV signals, it also directed the FCC “to establish a streamlined process for filing of an effective competition petition… for small cable operators, particularly those who serve primarily rural areas.”

The FCC took that direction and truly simplified the process. A new rule [PDF] issued in July 2015, presumes that satellite TV services offer effective competition in every market. This change shifts the burden of demonstrating effective competition from the shoulders of the cable companies and onto the local franchise authorities.

And because of this presumption of competition, the FCC determined that all existing rate-regulation jurisdictions would expire within 90 days if the affected franchise authorities did not file new requests for certification.

On Friday, the National Association of Broadcasters, the National Association of Telecommunications Officers and Advisors, and the Northern Dakota County (Minnesota) Cable Communications Commission filed a joint petition [PDF] with the D.C. Circuit Court of Appeals, alleging that the FCC Order is “arbitrary” and “capricious.”

The franchising authority from Minnesota is the most directly impacted of the three petitioners as it is one of the franchises whose rate-regulation certification may be terminated because of the change.

In a blog post explaining their side of the lawsuit, the NAB contends that “By deeming the nation effectively competitive, the FCC stripped from local franchise authorities across the country their longstanding roles as cops on the beat. Without the power to protect consumers, local authorities are being pushed aside to allow for higher cable prices – especially for basic cable service – more mysterious fees, higher equipment costs, and the potential disintegration of the basic tier of service.”

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