FCC Cable-Franchise Changes Upheld

The FCC got a big win in federal court Friday.

By John Eggerton -- Broadcasting & Cable, 6/27/2008 1:16:00 PM

The Federal Communications Commission got a big win in federal court Friday.

The Sixth Circuit Court of Appeals rejected a challenge to the FCC's changes to cable-franchise rules, saying the changes were not arbitrary and capricious, were within the FCC's authority and deserved the deference the courts generally grant the expertise of a regulatory agencies.

Various states and city franchising authorities had challenged the FCC's March order streamlining the cable-franchising process and prohibiting local authorities from "unreasonably refusing to award competitive cable franchises." They argued that the FCC was unduly pre-empting their authority over the franchise process and asked the court to vacate the decision.

"We find that the FCC acted well within its statutorily delineated authority in enacting the order and that there exists sufficient record evidence to indicate that the FCC did not engage in arbitrary and capricious rulemaking activity," the court said in denying the petition.

"I am pleased that the court recognized and unanimously supported the commission's authority and our rules," FCC chairman Kevin Martin said in a statement Friday. "Over the past 10 years, cable rates have more than doubled. Consumers need greater choice and more competition to help address the soaring price of cable television. This ruling helps to ensure that new competitors to cable are not subjected to unreasonable delays, build-out requirements and fees when trying to compete with the incumbent cable operators."

Martin also pointed to the court's finding that the decision was not arbitrary and capricious.

"When we adopted this item, dissenting commissioner [Jonathan] Adelstein publicly criticized the [Media] Bureau for having insufficient record evidence. I am particularly pleased that the court directly addressed his claims, unanimously finding that there exists sufficient record evidence to indicate that 'the administrative record fully supported the agency's rulemaking and belies any claims of arbitrary or capricious regulatory activity'."

"The FCC apparently has more expansive authority than many believed," Adelstein responded. "The good news is that we can use our authority to promote competitive video offerings, while also protecting consumers and public access."

"The FCC order's potential harm and unfairness was substantially mitigated when the Commission later applied much of the relief to all providers," said National Cable & Telecommunications Association spokesman Brian Dietz. " Today's video marketplace is intensely competitive and consumers are enjoying more choice, more services and better value than ever before.  Cable operators will continue to work hard to provide to consumers the best range of video, broadband and voice services to be the preferred choice of consumers."

The FCC initially streamlined the franchise process for new entrants like phone companies, but then extended it to cable incumbents as well.