'Ubiquitous' DBS Satisfies Effective Competition Requirements, FCC Says

The “ubiquitous nationwide presence” of satellite carriers “presumptively satisfies” the requirements for effective competition throughout the country, said the order making effective competition a rebuttable presumption for all cable, adopted Tuesday but not released until late Wednesday. Tuesday was the deadline for new effective competition rules established by the Satellite Television Extension and Localism Act Reauthorization (STELAR) Act. As expected, the rule change was approved on the support of FCC Chairman Tom Wheeler and Republican commissioners Ajit Pai and Mike O'Rielly, while Democratic commissioners Jessica Rosenworcel and Mignon Clyburn approved only rule changes for small cable systems and dissented from the rest. “I cannot support relief to larger providers particularly when doing so could harm consumers and unnecessarily increases the burdens on our local franchising authorities,” Clyburn said in a statement released with the order.

The largest cable companies don't face effective competition in their local markets, Public Knowledge said in a statement. PK and many other public interest groups joined with NAB in opposition to granting the rebuttable presumption for all cable. Large cable companies “are in a fundamentally different marketplace position than the small cable operators that Congress is concerned with,” PK said. NAB issued a statement expressing its disappointment with the rule change Wednesday. “We question why the Commission would make this switch and paint the marketplace with such broad strokes,” said Free Press Policy Counsel Lauren Wilson.

Declaring that all cable faces effective competition could have “unintended consequences,” said Clyburn, who along with Rosenworcel was praised by PK for partially dissenting. The FCC “inexplicably races past” the directives from STELAR and “instead provides all cable operators -- from the biggest to the smallest -- with an expedited process to avoid oversight,” Rosenworcel said. “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.”

The FCC's rules “should reflect the competitive and technological conditions of today, not those of twenty or forty years ago,” said Pai in his statement with the order. “The agency can’t keep living in the past,” he said, quoting an episode of Seinfeld, according to a footnote. “We have an affirmative obligation to streamline our procedures when appropriate, and certainly when it meets the statutory requirement,” O'Rielly said.

The FCC order is dismissive of broadcaster arguments that the policy change threatens broadcasting being carried on the cable basic tier, a broadcast attorney told us. The order said broadcasters haven't been moved off the basic tier when effective competition was found previous to the rule change. “If a finding of Effective Competition results in elimination of the basic service tier requirement -- a statutory interpretation issue that we do not address here -- that conclusion would apply not only in communities where the new presumption of Effective Competition is not successfully rebutted but also in the thousands of communities in which we have already issued findings of Effective Competition,” the FCC said. Broadcasters haven't been bumped from the basic tier in any of these areas, the FCC said. The concerns expressed by commenters in this regard are unpersuasive, the order said. O'Rielly also disputed broadcaster concerns about cable carriage. “I do not believe that this item and the reasoning articulated within will impact the continued existence of the basic service tier,” he said. “It is certainly not my intent to do so in this item and those reading the statute in such an extended way seem misguided,” he said. However, O'Rielly seemed to be open to rules that would change the basic tier. “That is not to say it is not a logical consideration for Congress to explore and assess given the changing video marketplace,” he said.