When is some competition enough?

Beginning with the 1992 Cable Act, the FCC allowed local franchise authorities to regulate local cable rates only if there was not a finding of effective competition.*  At the time, cable operators had a 95% share of the MVPD market.

Pointing to the now ubiquitous availability of satellite TV and evidence that 99.7% of U.S. homes have access to at least 3 MVPDS (and 35% with access to 4 MVPDs), the FCC, in June, adopted a rebuttable presumption that cable operators, both large and small, are subject to Competing Provider Effective Competition.  The rule, approved by a 3-to-2 margin, shifts to local governments the burden of demonstrating that effective competition does not exist in their communities in order for them to regulate local cable rates. 

Concerned about less oversight at the local level and the possibility that cable operators who had negotiated retransmission consent agreements may choose not to carry broadcasters on the basic service tier, the National Association of Broadcasters (NAB) and two other groups petitioned a federal court for a review of the new FCC rule.  Since its filing about a month ago, no action has been taken by the court.  Today, however, the American Cable Association (ACA) and National Cable & Telecommunications Association (NCTA) requested the court if they could intervene in support of the FCC's decision.

*4 categories of effective competition: 1) low penetration, 2) competitive provider, 3) municipal provider, and 4) LEC provider.