Hill Heats Up Over Effective Competition

Letters fly as order circulation nears
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Congress continues to weigh in on the FCC's proposal to presume cable operators are subject to competition absent a showing to the contrary. Currently, the presumption is that a local market is not competitive.

A finding of effective competition by the FCC relieves operators of local basic cable rate regs.

The latest salvos came from both sides of the aisle and of the issue, and came as the FCC was expected any day to circulate an order on the issue.

In a letter dated May 13, Rep. Anna Eshoo (D-Calif.), ranking member of the House Energy & Commerce Committee's Communication Subcommittee, 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%.

They pointed to the time-consuming and costly requirement of the effective competition provision, and said that not making cable ops engage in long and costly proceedings allows more flexible packaging options to consumers.

They also said saving FCC resources would be saving taxpayer dollars.

On the other side, Rep. Frank Pallone (D-N.J.), ranking member of the House Energy & Commerce Committee, in a letter also dated May 13, asked FCC chairman Tom Wheeler to think hard about the impact of reversing the presumption, pointing to a New Jersey franchising authority's concerns and the impact of the move on consumers.

He also said that the FCC could simply streamline the petition process and leave the larger question about reversing the presumption for another day, basically inviting him to punt on the proposed reversal.

The FCC is under an early June congressional deadline to produce an order streamlining the process for smaller cable operators. It was that order the chairman proposed to use to streamline it for all operators by reversing the presumption.

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