FCC tweaks cable on rate increases

The Federal Communications Commission fired a not-too-subtle shot across cable’s bow by promising to carefully monitor rate increases and competition within the video delivery industry during an open meeting today.

“I have heard over the past months, as I imagine many of my colleagues have, many rumblings of discontent about the rate at which cable rates have been increasing, which is significantly faster than the rate of inflation has been increasing,” said Commissioner Michael Copps.

These rate increases, he said, are less prevalent in areas where cable faces competition, thus, it is important to track and encourage competition.

“I think we’re all going to be watching cable rates very carefully and watching to see if they reflect the discipline of competition,” he said.

While the Commission took no steps to re-institute rate regulation over cable operators, it did continue a ban on cable companies from keeping programming off rival satellite services.

Interestingly, the FCC noted that while all satellite-delivered programming must be made available to cable’s competition, some regional news and sports programming can remain in cable’s exclusive hands because it never goes up to the birds.

“It’s not clear whether in adopting the language that applied the exclusivity provision to satellite-delivered programming that Congress anticipated that the distinction it drew would exempt locally produced programming from this prohibition,” said Copps.

That’s a hot button among consumer groups opposed to Comcast’s takeover of AT&T Broadband. Comcast has an iron grip on regional sports programming in the Mid-Atlantic region and uses that as an advantage over satellite, opponents argue.

While this exclusive regional programming bears further scrutiny, it is not sufficient “to find that this prohibition continues to be necessary,” said Commissioner Kathleen Abernathy, in opposing the extension. “The only two potential markets where this could be a problem are New York and Philadelphia, and I don’t believe that concerns for those two markets should drive our decision nationwide.”

Dan Brenner, senior vice president for law and regulatory policy at the National Cable & Telecommunications Association [NCTA] called the original 1992 FCC ruling a “regulatory relic” that has been eclipsed by satellite industry growth.

“This vigorous, substantial competition assures that the vast majority of programming, whether owned by a cable operator or not, would be available to all distributors,” Brenner said in a statement released by the NCTA. “Eliminating this rule this year would have restored balance in allowing limited exclusivity to be used to differentiate competitive offerings.”