FCC Sets Effective Competition Comment Deadlines

Has suggested the presumption should be reversed
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The FCC's Media Bureau has set the comment deadlines for its tentative proposal to presume, for regulatory purposes, that cable operators are subject to effective competition. The FCC was required by the satellite reauthorization bill to open the rulemaking.

Comments are due April 9 and reply comments April 20.

The FCC earlier this week voted 5-0 to seek input on whether it should make de jure what appears to be the case de facto: That cable operators are subject to effective competition, at least as defined by the 1992 Cable Act and when it comes to basic rate regulation of traditional video service.

Since the act provisions were adopted in 1993, cable operators were presumed not to be subject to effective competition and so basic cable rates could be regulated by the local franchising authority unless an operator could prove there was a second competitor. The FCC now wants to know whether given changes in the marketplace it ought to now presume a cable operator is subject to effective competition—the FCC is talking about traditional video, not broadband—which it would be incumbent on a franchising authority to prove was not the case.

The commissioners approved a Notice of Proposed Rulemaking that does not come right out and say the commission believes the presumption should be reversed, but sure suggests it.

The NPRM points out that since 2013, the Media Bureau has granted 224 petitions requesting findings of effective competition and granted four more in part. Only eight were challenged by franchising authorities and none were denied.

"We seek comment on whether the facts that over 99.5 percent of effective competition requests are currently granted, that over 80 percent of those grants are based on competing provider effective competition, and that DBS has a ubiquitous presence demonstrate that the current state of competition in the MVPD marketplace supports a rebuttable presumption that the two-part test is met."

The two-part test is that 1) "that the franchise area be served by two unaffiliated MVPDs each of which offers comparable programming to at least 50 percent of the households in the franchise area;" and 2) "MVPDs other than the largest MVPD have captured more than 15 percent of the households in the franchise area."

As to the first part of the text, the FCC has already ruled in hundreds of cases that the presence of Dish and DirecTV mean that a comparable competing provider is available to 50% of the audience. And although the item said that not every franchise area has a sub count approaching 34%, that is the national average.

The item is full of questions about the logistics of handling the reversal.

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