The FCC is working through the latest spate of MSO petitions seeking regulatory exemptions under the competition clause.
The Commission recently just designated as competitive dozens of markets in which Comcast, Time Warner Cable, and Bright House Networks operate networks. Last week, the FCC exempted Cablevision from the same regulations in nearly two dozen markets.
Once a market is certified as competitive, municipal and/or state rights to regulate basic cable service rates are revoked.
Often enough, states and cities do not challenge the petitions. In the recent batch, the State of Hawaii challenged Time Warner Cable’s request to declare the Big Island competitive, on the technicality that the island represented more than one market, and that TWC’s footprint there was far from complete, but the FCC rejected its arguments.
Part of the Communications Act [Section 623(l)(1)(B)] provides that a cable operator is subject to effective competition if the franchise area is served by at least two unaffiliated multi-channel video programming distributors (MVPDs), each of which offers comparable video programming to at least 50 percent of the households in the franchise area; and the number of households subscribing to programming services offered by MVPDs other than the largest MVPD exceeds 15 percent of the households in the franchise area. This test is referred to as the “competing provider” test.
Many MSO markets that are also served by DirecTV and Dish Network qualify under the rules. (It is noteworthy that the failure of the two DBS companies to merge into a single entity serves the cable industry well under these particular circumstances.)
For the purpose of determining if a market is competitive, it does not matter if the cable operator or one of the DBS competitors is the largest MVPD in the market.
Cable operators for years have been churning out petitions to declare markets competitive, and the FCC tends to approve them in batches.
TWC markets deemed competitive include the Island of Hawaii, both the East and West markets; three markets in Texas, including El Cenizo, Laredo, and Rio Bravo.
Markets covered by the TWC / Newhouse (Bright House) partnership include a number of small cities, villages, and some unincorporated counties in the South, many though not all in North Carolina.
Comcast earned exemptions in Danville, Va., and several towns in Washington State.