FCC Commissioners dissent from Chairman Wheeler?s ?effective competition? Order

The Federal Communications Commission (FCC) adopted a new effective competition presumption in the cable industry. Until recently, cable operators were required to provide evidence that they faced “effective competition” in a local market. Now, based on the new FCC Order, the FCC assumes a competitive pay TV market, moving the burden of proof from cable operators to local franchising authorities and relieving cable providers from basic-tier rate regulation.

In a recentstatement, Wheeler defended the FCC’s new position:

This is our presumption: competition results in lower prices for consumers. However, any local franchising authority is free to come to the FCC and rebut this new presumption for its service area, and, where successful, regulate basic tier cable rates. In addition, nothing in this Order affects other franchising authority responsibilities including the collection of franchise fees, provisions relating to PEG [public, education, and government] channels and I-Nets [institutional networks], and the creation and enforcement of customer service standards.

As Speed Matters reported earlier, the FCC’s new presumption facedopposition from politicians. FCC Commissioners Clyburn and Rosenworcel dissented in part to the Order. Clyburnexplained that the new presumption “may harm consumers with increased prices” and “unnecessarily [burden] local franchising authorities,” while Rosenworcelargued that the Commission’s new effective competition presumption surpasses Congress’ direction, ignoring consumers’ interests:

. . . the Commission inexplicably races past this straightforward statutory directive and instead provides all cable operators—from the biggest to the smallest—with an expedited process to avoid oversight. This is contrary to what Congress asked us to do, at odds with the recommendation of the Commission’s own Intergovernmental Advisory Committee, and provides no clear benefit to consumers.

Statement of Chairman Tom Wheeler (FCC, June 4, 2015)

Opposition to Chairman Wheeler’s “effective competition” order grows (Speed Matters, June 1, 2015)

Statement of Commissioner Clyburn (FCC, June 4, 2015)