Overlapping Cable Rate Proceedings Seen Giving the FCC Multiple Options
Faced with overlapping basic cable rate regulation proceedings -- proposed changes to basic tier regulation by local franchise authorities (LFAs) (see 1810230037) and Charter Communications' effective competition petition in Massachusetts and Hawaii (see 1809170020) -- the FCC is likely to handle them separately, though timing and order isn't clear, experts tell us.
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A cable industry executive told us that even if the FCC went for the Charter petition, with the practical effect being the bulk of the country facing effective competition, cable rate regulation would remain on the books and the possible sale or discontinuation of DirecTV Now would mean those basic rate rules again become applicable. So the FCC is likely to act on the Further NPRM regardless of what it does about the Charter petition, he said. But it's possible the agency could act on the FNPRM and then leave the Charter petition alone, telling the company it's received some regulatory relief. Charter didn't comment. The cable exec said if the agency acted on the Charter petition first, it's possible locality interests would then argue to the agency there's no reason to address the basic cable rate rules, though the cable industry would argue against that.
The FCC under Chairman Ajit Pai leans toward wanting to limit cable rate regulation as much as possible and houseclean those rules, and it's also likely more sympathetic to cable operators than to Massachusetts and Hawaii, said localities lawyer Tim Lay of Spiegel & McDiarmid. He said while some Democrats might sympathize with LFAs, they also might not be as unified as Republicans. Republican support of the FNPRM is expected (see 1812200042). Lay said while the cable industry isn't pushing hard on the FNPRM, it doesn't need to since it already has momentum at the FCC and there's no strong constituency to push back. The FCC, Hawaii and the Massachusetts Department of Telecommunications and Cable didn't comment.
The agency likely will keep the two separate proceedings, with the basic rate regulation FNPRM being part of the agency's media modernization and deregulatory effort and the Charter petition potentially seeing more pushback, NATOA General Counsel Nancy Werner said. She said there are likely rules modernization routes the FCC can take on the FNPRM that would satisfy both the cable industry and LFAs.
Charter, which has been lobbying the agency regarding its petition (see 1812260036), said in a docket 18-283 posting Friday that it's continued those efforts as it recapped a meeting with an aide to Commissioner Brendan Carr.
The use of “facilities” in Section 543(l)(1)(D) of the Communications Act shows Congress’ clear intent that the LEC test applies only to carriers using their facilities to provide video programming in competition with a cable television operator, Hawaii said in a separate Friday posting in the docket. It also said that the argument the facilities requirement applies to LECs only when they act as MVPDs doesn't jibe with that section of the act.