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FCC Deregulates Basic Rates For Slew of Systems

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Created 01/26/2007 - 1:49am

SA Note: The Telephone companies have been using increased cable rates as a justification for deregulating their entry into cable delivery services (by eliminating public interest requirements, local control, etc). Cables pricing was deregulated federally in the '96 Telecom Act, since then, only local municipalities maintain some a level of control over pricing. The FCC is fueling the fire of the Telco campaigns by further deregulating cable prices, often in advance of Telco deployment and by removing the authority of local municipalities to limit rate increases.

from: Broadcasting and Cable [1]
FCC Deregulates Basic Rates For Slew of Systems
By John Eggerton

The FCC has granted effective competition determinations for a host of cable operators, including determinations based on the presence of FiOS TV in the market.

The move deregulates basic cable rates for a number of systems belonging to Comcast, Bright House, Charter, Cablevision. Telesat and Mediacom, including 42 Southern California franchises for Comcast.

Also triggering the decisions were the presence of satellite competition from DirecTV and Echostar.

According to FCC rules, local authorities ability to regulate basic rates is revoked when a cable company has low penetration, can show that a market has at least two competing multichannel video providers offering comparable programming to at least 50% of the market and that at least 15% of the market takes each service.

In most cases, the cities and towns involved challenged the cable company assertions, but the FCC concluded they had made a sufficient showing of effective competition.

In the case of local exchange carriers like FiOS, the FCC requires that the LEC is able to provide service that "substantially overlaps" the franchise area, that it intends to build out the video system in a reasonable period of time, that customers are aware of it, and that it has actually begun to offer service.

Interestingly, cable companies not have to demonstrate that the effective competition from a second cable company or from satellite or telco video, is effective price competition, which is just as well since the FCC's recent cable pricing report concluded that the presence of satellite in the market does not equate with price competition.

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