Did FCC Cop Out on Cable Rates?
Under the Cable Television Consumer Protection and Competition Act of 1992, cable operators were presumed to have little competition. In those days, they had more than 95 percent market share. Today that’s fallen under 50 percent with the arrival of satellite and telco-TV operators. However, there seems to be a gentleman’s agreement among cable, satellite, and telco-TV operators that pay-TV should get more expensive all the time (with the possible exception of Verizon—see “Networks Knock ‘Skinny’ Verizon,” page 24).
The FCC voted 5 to 0 to reverse the presumption that small cable operators have little competition. The vote to extend that to larger cable operators was closer, at 3 to 2, with the two Republican commissioners joining Democratic chair Tom Wheeler, and the other two Dems dissenting. The vote ratified existing practice, in which the FCC admits it already “grants nearly all requests for a finding of effective competition.”
Sentiment in Congress mostly supported the FCC action. Sen. John Thune (R-SD) said the FCC “has recognized the competitive reality,” noting that the $23.01 paid in “noncompetitive communities” is close to the $22.51 paid in others deemed competitive. However, the cable price report he cited applies only to basic cable packages consisting primarily of broadcast channels.
That’s why the FCC’s latest presumption is “flawed,” according to John Bergmayer of consumer watchdog Public Knowledge. He says large cable operators “bundle cable television with high-speed broadband and often have control over valuable programming. They are in a fundamentally different marketplace position than the small cable operators that Congress is concerned with.”