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Effective Competition Order Circulated - Broadcasting & Cable

Effective Competition Order Circulated

Still calls for reversing presumption
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According to a source familiar with the item, FCC chairman Tom Wheeler has circulated the order on effective competition and it still proposes reversing the presumption that local markets are not competitive when it comes to traditional video.

The FCC has a June 2 congressional deadline to produce an order streamlining the effective competition process for smaller, particularly rural-serving cable operators, but broadened that into the proposal to reverse the presumption given that it has not denied an effective competition request in a couple of years — due largely to the presence of satellite TV service nationwide.

A ruling of effective competition means a cable system is no longer subject to basic tier rate regulation and the requirement to carry retrans stations in that tier.

Broadcasters have been pushing back hard on the proposal, as have a number of high-profile Democratic senatorsand public interest groups, as well as the local franchising authorities that will lose rate regulation authority. But not all Democratic legislators oppose the move. Ranking House Communications Subcommittee member Anna Eshoo (D-Calif.) joined with Republican Steve Scalise (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 dates from the 1992 Cable Act, which dates from a time when cable ops had a 95% MVPD market share, which is now a tad over 50%.

Back in April, the FCC's Media Bureau denied a petition by the National Association of Broadcasters and Public Knowledge to narrow the scope of its decision, saying Congress never meant it to reverse the presumption, and certainly not for all operators, when it told the FCC to streamlining the process for smaller operators.

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