Saying the FCC's decision was arbitrary and capricious and a violation of statute, the National Association of Broadcasters, joined by local cable franchising authorities, told a federal court it should overrule the FCC's decision to presume cable operators are subject to local market competition unless presumed otherwise.
That came in opening briefs to the U.S. Court of Appeals for the D.C. Circuit. Broadcasters argue reversing the presumption will lead to higher prices and cable operators pulling local TV station signals off the basic tier.
The presumption had been that cable systems were not subject to competition, and were subject to basic cable rate regulation, unless the cable operator could prove otherwise. But after the STELAR satellite act directed the commission to take steps to ease the burden on smaller cable ops of rebutting that presumption, the FCC instead decided to reverse it given that it had granted virtually all of the cable operator requests for a finding of effective competition over the past several years, based primarily on the near ubiquitousness of satellite competitors, and mostly without objections from local authorities.
But in their brief to the court, broadcasters and the National Association of Telecommunications Officers and Advisors, said it was irrational for the FCC to presume that a cable system faces effective competition in the 23,000 franchise areas not previously found based on the market shares of competing providers.
It also said the FCC was wrong in interpreting the STELAR mandate to ease the effective competition process for smaller operators as a mandate to "abolish" the process for all operators.
They say that the FCC can't simply reverse the presumption in order to avoid what they maintain is the statutory requirement of an evidence-based finding of effective competition, evidence that needs to be specific and come from a particular franchise area.
They say that the fact that franchise authorities did not challenge cable op effective competition petitions did not relieve the FCC of its duty to make a finding regarding that competition.