FCC Seeks to Eliminate Its Cable Rate Regulations

The Federal Communications Commission adopted a Further Notice of Proposed Rulemaking and Report and Order addressing cable rate regulations. In most of the US, basic service tier and equipment rates, together known as cable rates, are no longer regulated because the markets are deemed to be competitive by law due to the availability of satellite television and other services. However, in some communities in two states, Hawaii and Massachusetts, rates remain regulated. Under our current rules, cable operators in those markets must use a series of FCC forms to calculate reasonable rates that local franchising authorities must review and approve.

This FNPRM seeks comment on whether to adopt fundamental changes to the FCC’s existing complex cable rate regulation framework. For example, it asks whether the FCC should eliminate all existing rate regulation forms and create a simplified structure for ensuring reasonable basic service rates in those few localities that remain rate regulated. Alternatively, it seeks comment on updating the existing cable rate regulation rules, including limiting equipment rate regulation, exempting small cable systems owned by small cable companies from rate regulation, and clarifying that cable services provided to commercial establishments such as office buildings and shopping malls are not subject to rate regulation. It also seeks comment on streamlining the initial rate setting methodology, which requires using data from as far back as 1992. These proposed changes would eliminate multiple FCC forms and rules. The Report and Order eliminates or revises rules that have become obsolete due to the sunset of rate regulation for cable programming service tiers, are unnecessary given changes in industry practices, or have become obsolete due to changes in Commission policy.