Cable providers led by Comcast can raise customer rates without approval from local governments under a change by the Federal Communications Commission.
Cable providers led by Comcast can raise customer rates without approval from local governments under a change by the Federal Communications Commission that was opposed by broadcasters.
Communities lost oversight of basic programming packages when the commission voted 5-0 on a proposal by FCC Chairman Tom Wheeler, the agency said Wednesday. Wheeler’s two Democratic colleagues objected to extending relief to large cable companies, but supported the broader change.
Currently, cable companies seek FCC approval to escape local rate setting. Requests are almost always granted: The agency says it approved all but four of 224 since 2013. Comcast, the nation’s biggest cable provider, said about 17 percent of its subscriber base is subject to rate regulation by local government.
With the change, the FCC will assume cable companies deserve relief from local rate regulation. It falls to jurisdictions to ask for permission to retain that power.
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The FCC said it was changing its 22-year-old rule because the market has changed, with nationwide competition from satellite television.
The FCC’s new method “reflects the reality that effective competition exists throughout the nation, and provides relief to operators both large and small,” Wheeler said in an emailed statement.
Most U.S. jurisdictions have power to regulate rates for basic programming packages, according to policy groups including Common Cause and Free Press. Consumers Union told the FCC that “there is little evidence to suggest that today’s cable marketplace is a competitive one” given subscription rates rising faster than inflation.
Broadcasters fear cable companies can now assign TV-station signals to pricier tiers, cutting the audience for local programming, said Dennis Wharton, spokesman for the National Association of Broadcasters trade group. In a statement Wednesday he called the FCC decision “disappointing and surprising.”
The FCC has no evidence that broadcast stations were reassigned to different channel packages after regulation was lifted in thousands of communities, Wheeler said.
Cable companies said the move eliminates needless red tape.
“We welcome the FCC taking common-sense action to adopt a needed update of its procedures and rejecting the self-interested fear-mongering of broadcasters,” said Brian Dietz, a spokesman for the National Cable & Telecommunications Association. Comcast is a member of the trade group.
Congress asked the FCC to simplify procedures for small cable companies, and Wheeler’s change provides “unnecessary regulatory benefits to large cable companies,” 13 U.S. senators, all Democrats along with one independent, said in a May 12 letter to Wheeler.
Consumers may see higher rates and fewer channels in the lowest-cost program packages, said the senators including Al Franken, of Minnesota.
The FCC’s action provides no clear benefit to consumers, and to the extent it exceeds Congress’ directive to help small providers, “I dissent,” FCC Commissioner Jessica Rosenworcel said in a statement. Fellow Democratic Commissioner Mignon Clyburn said she voted to approve the change for smaller operators, and objected to further relief.