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In Court Brief ACA Supports FCCs Finding Of Cable Effective Competition

Agency’s Data-Driven Decision Deserves Court Deference

PITTSBURGH, February 18, 2016 - The American Cable Association filed a court brief supporting the Federal Communications Commission's 2015 decision that cable operators face effective competition nationally based on the ubiquitous, 50-state presence of DirecTV and DISH, the leading satellite TV providers serving about 33 million subscribers combined.

"The FCC's decision to adopt a rebuttable presumption that cable operators are subject to effective competition nationally is reasonable, supported by the record, and within the FCC's statutory authority," ACA President and CEO Matthew M. Polka said. "The FCC's action was long overdue and clearly deserves judicial deference."

ACA filed the brief jointly on Feb. 16 with the National Cable & Telecommunications Association in the U.S. Court of Appeals for the District of Columbia Circuit, where TV station owners and local franchising authorities (LFAs) filed suit to overturn the FCC's historic order to free cable operators from the last vestiges of rate regulation under the 1992 Cable Act.

As a practical matter, the FCC's decision protects independent cable operators from having to absorb large legal and data-collection costs associated with demonstrating to the FCC the self-evident truth that they face vigorous competition from both DISH and DirecTV as well as other multichannel video programming distributor (MVPDs), including AT&T U-verse or Verizon FiOS.

In the past, cable operators had the burden of providing evidence of effective competition, a test that involved a showing that competing MVPDs combined serve at least 15% of pay-subscribers in an LFA. Congress recognized the harmful effects of these burdens by ordering the FCC to streamline the effective competition process in the Satellite Television Extension and Localism Act Reauthorization Act of 2014 (STELAR).

In a data-driven analysis, the FCC reversed its 1993 policy that there were virtually no competing MVPDs and that cable operators were not subject to effective competition.

Based on a compelling record showing dramatic change in the market, the FCC found that it granted effective competition petitions in more than 99.5% of the communities evaluated from 2013-15 and that local governments were opposing fewer and fewer cable operator petitions for effective competition. The FCC also found that satellite-TV penetration stood at 34% nationally and that competing MVPDs combined had at least 15% penetration in each of the country's 210 Designated Market Areas.

"The FCC correctly concluded that the probability of a cable operator serving more than 85% households in an LFA is extremely low, justifying a decision now to require LFAs to produce evidence showing an absence of effective competition," Polka said. "This ruling was especially helpful to smaller MVPDs for it will relieve them of administrative and financial burden associated with regulation by default."

About the American Cable Association: Based in Pittsburgh, the American Cable Association is a trade organization representing nearly 750 smaller and medium-sized, independent cable companies who provide broadband services for nearly 7 million cable subscribers primarily located in rural and smaller suburban markets across America.  Through active participation in the regulatory and legislative process in Washington, D.C., ACA's members work together to advance the interests of their customers and ensure the future competitiveness and viability of their business.  For more information, visit http://www.americancable.org


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