City and county franchise authorities should push back against the FCC’s recent decision reducing their authority over basic cable rates.
After the Federal Communications Commission took one step forward, it has now taken a disappointing step back.
The agency made great progress when it approved net neutrality rules in February, preventing broadband providers from discriminating against content carried on this essential infrastructure.
But the FCC lost a few of its freshly minted gold stars last week, when it sided with the cable industry and undermined local authority over basic cable rates.
The agency decided that the pay-TV business has plenty of competition now, so local governments shouldn’t be able to automatically negotiate basic-cable rates.
This disappointing move could jeopardize entry-level cable plans that remain the last affordable option for many homes.
[The FCC's] move could jeopardize entry-level cable plans that remain the last affordable option for many homes.”
It also increases the burden on cities and counties by forcing them to submit requests to renew what little authority they currently have over cable companies.
Really, this is like fighting for table scraps. After years of deregulation, local governments were left with little say over rates, even though they own the rights of way and poles on which cable systems are built.
One of the last toeholds of local authority was the ability to negotiate for a bare-bones tier of truly basic-cable channels — composed mostly of local broadcast stations — for around $16 per month.
This “limited basic” service is important to people who are unable to receive broadcast or satellite signals and cannot afford a pricey cable plan.
It’s also important in places like the Northwest, where cable can be the only option for TV signals if hilly terrain and trees interfere with broadcast and satellite reception.
Limited basic is also an appealing option for people who watch mostly online video and don’t want to pay for 200 channels of reruns.
In Seattle, about one-fourth of Comcast’s customers — 38,000 households — have limited basic service, according to the city’s cable franchise office. In King County, roughly 20 percent of customers have limited basic.
Under the FCC’s rule change, local franchise officials’ authority over basic-cable rates is further diminished.
Cities and counties will be given a 90-day window to appeal and request an extension of their authority.
Big assumptions underlie the rule change. The FCC believes people now have plenty of options for getting pay TV; it no longer presumes that cable companies dominate local markets, putting the burden of proof on cities and counties.
The FCC may be less concerned about pay-TV competition because the rise of online video suggests cable will be eclipsed by broadband service. That may be the case eventually, but for now cable remains a critical service for many homes.
Instead of making it harder to preserve the limited basic option, the FCC should be making sure it remains available to municipalities and their residents — especially given the consolidation under way in the cable industry and the loss of broadcasting capacity that will result from the upcoming spectrum auction.
Affordability and access are the major concerns today.
But in the future, when broadband networks are likely to face a capacity crunch, it will be in everyone’s interest to have a variety of pipes available to deliver content and balance the load.
The need for limited basic cable would soar if and when broadband providers start charging by the megabyte, with data plans instead of flat rates — which would increase the cost of streaming online video.
In the meantime, cities and counties should pursue their options under the FCC’s new rules. They should push hard to ensure that there continues to be an affordable option for the cable TV delivered via public property.