Effective Competition Change Could Affect Broadcasters, Goes Beyond STELAR, Say NAB, PK
Instituting a rebuttable presumption that all cable companies face effective competition could have consequences for what's offered on cable’s basic tier and goes beyond congressional intent in the Satellite Television Extension and Localism Act Reauthorization, broadcast industry officials and public interest group Public Knowledge told us. The proposal was put forward by the FCC in an NPRM last week (see 1503260037). “While Congress’s directive is limited, procedural in nature and focused specifically on small cable operators, the Commission’s NPRM is wide-ranging and has the potential to have a seismic impact on consumers throughout the country,” said Public Knowledge and NAB in a filing asking the FCC for more time to comment on the NPRM.
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Though the STELAR provision on which the NPRM is based compels the FCC to provide relief from effective competition rules for only small cable companies, the agency seeks comment on providing that relief to all cable companies, NAB and Public Knowledge pointed out. The STELAR provision shouldn’t “provide an occasion for the FCC to relax its standards for all operators,” said Public Knowledge Senior Staff Attorney John Bergmayer. “With respect to the largest cable operators, I think the FCC's current standards are too lax.” NAB Executive Vice President Rick Kaplan said the STELAR proceeding and the FCC provided no hint that wider relief was being contemplated. “We were taken completely by surprise by an NPRM proposing undoing a regime that had been in place for two decades,” Kaplan said. The Media Bureau declined to comment.
Declaring all cable companies not subject to rate regulation could have consequences for broadcasting, said broadcast and cable industry officials. A 1995 U.S. Court of Appeals for the D.C. Circuit case, Time Warner v. FCC, is seen as linking the basic tier rule to rate regulation, and may mean that cable companies declared to meet the requirements for effective competition don’t have to abide by it, a cable attorney said. Though cable companies found to meet the effective competition standard so far have followed the rule, they might not do so if the whole country were found to have effective competition, a broadcast attorney said. Such a situation likely would lead to extensive litigation, said the lawyer.
STELAR requires the FCC to implement effective competition relief for small cable operators by June 2, said NAB and Public Knowledge's filing. That may be driving the FCC to compress the time scale of the proceeding, but it’s not long enough for a rule change of this scope, Kaplan said. Instead of 20-day comment periods, such a broad rule change should begin with a notice of inquiry and extended commenting deadlines, he said. The FCC could fix the problem by scaling down the proceeding to focus on small cable operators as required by STELAR, said NAB and Public Knowledge. “The more pointed inquiry tied to what Congress actually sought will allow commenters to focus their analyses and comments on only those issues that must be addressed,” said the extension request. “If the Commission is intent on pursuing the NPRM’s more sweeping proposals, however, we urge it to extend the deadlines for comments and reply comments so that affected parties can fully digest the NPRM’s questions and develop the most robust submissions.”