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ACA: FCC Should Adopt Plan Finding Cable Faces Effective Competition

Ignore Broadcasters’Red Herrings, Trade Group Says

PITTSBURGH, April 21, 2015 - The American Cable Association urged the Federal Communications Commission to move forward with a plan supported by a robust supply of market data to presume that all cable TV providers face effective competition nationally, justifying putting the legal burden on state and local regulators to demonstrate the absence of competition on a case-by-case basis.

Unlike two decades ago, cable operators today face strong competition from two national satellite TV providers and in some cases up to three more terrestrial multichannel video programming distributors (MVPDs). Competitive forces have reduced cable's market share nationally to 55%, with competing MVPDs serving at least 15% of pay-TV subscribers in each of the country's 210 local TV markets.

"The FCC has ample authority and ample reason to replace its existing, outdated presumption against effective competition with a presumption of effective competition that more accurately represents today's video marketplace," ACA President and CEO Matthew M. Polka said. "At the very least, the FCC should adopt this revised presumption for small cable operators in order to carry out Congress' direction to the FCC in Section 111 of STELAR to streamline the process by which small cable operators are determined to be subject to effective competition."

In reply comments filed April 20, ACA urged the FCC to adopt a rebuttable presumption that cable operators face effective competition, removing the last vestiges of rate regulation in the 1992 Cable Act. This action would mean that small cable operators would not have to incur the needless expense, as they currently do, to demonstrate the market share incursions of their MVPD rivals. Instead, local franchising authorities would be required to demonstrate the absence of effective competition in a particular community.

ACA said the FCC should disregard meritless arguments raised by some parties.  For example, a presumption of effective competition would have no impact on local TV stations or so-called PEG channels controlled by local franchising authorities.  Over the years, the FCC has approved petitions for effective competition affecting more than 10,000 communities - one-third of all cable franchises -- without any sort of negative fallout on PEG channels or full-power TV stations that elect must carry or retransmission consent. The practical reality is that stations electing retransmission consent have the leverage to demand and obtain guaranteed carriage to all subscribers as a condition of granting such consent.

Although Congress intended for the FCC to streamline the effective competition process in a wholesale manner, ACA said that if the FCC does not agree, the agency should at the very least allow small cable operators to rely on a revised rebuttable presumption that effective competition is present in the communities they serve. Congress recognized that the burdens faced by small cable operators may be different than those faced by larger operators when it enacted Section 111 of STELAR.

"The FCC would be shirking its duty if it did not at least provide the relief offered by its rebuttable presumption proposal to small cable operators," Polka said. 

About the American Cable Association: Based in Pittsburgh, the American Cable Association is a trade organization representing nearly 850 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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