FCC Probing Cable On Channel Moves

Agency Asks At Least 10 Cable Companies For Data

By Ted Hearn -- Multichannel News, 11/3/2008 5:05:00 PM

Washington—The Federal Communications Commission is investigating whether cable companies are violating any rules by moving a handful of channels from analog to digital tiers.

According to FCC and cable industry sources, at least 10 cable companies received letters Oct. 30 from the FCC's Enforcement Bureau seeking extensive data as far back as November 2006. The FCC demanded responses within 14 calendar days.

The FCC is evidently concerned by allegations made by Consumer Reports that cable operators are moving channels to digital and then charging consumers to rent digital boxes to maintain access to the same number of channels. The FCC is also looking at whether cable operators lower the price of an analog tier after channels have been removed.

A spokesman for Consumers Union, publisher of Consumer Reports, said he had no evidence that cable operators are requiring consumers to purchase a digital programming tier along with the set-top box when they want to retain access to the channels removed from their analog package.

Local governments regulate basic rates of cable systems that are not considered subject to effective competition. In March 1999, the FCC lost its authority to regulate the price of program tiers higher than basic, regardless of whether an effective competition finding has been made.

The FCC's probe into cable's digital TV transition is related to another investigation into whether cable operators are deploying switched digital video (SDV) technology in a manner consistent with federal rules designed to allow consumers to access cable programming without an MSO-supplied set-top box.

A cable industry lawyer said the FCC's investigations have prompted some cable companies to put on hold their various digital TV transition and bandwidth management strategies until the FCC issues rulings.