The success of direct-broadcast satellite and, to a lesser extent, cable
overbuilders is allowing more incumbent cable franchises to free themselves of
local regulation of basic rates by proving that they face effective competition
in their markets.
A funny thing is happening, however, FCC staffers said: There have been far
fewer requests for official certification of that effective-competition status
Rather than applying for FCC approval, franchises that believe they qualify
are simply giving themselves the green light to adjust rates. If competitors or
consumers complain, then the incumbent operators argue effective
That was the case in the Los Angeles area, for example, where Altrio
Communications Inc. complained about Adelphia Communications Corp.'s
cost-cutting in neighborhoods Altrio has entered.
More of these spats are expected as DBS and overbuilder penetration
increases. Freed of basic-rate oversight, incumbents are allowed to advertise
uniform rates across their clusters rather than charging separate levies set by
the communities' municipal authorities.