Washington— City regulators in Dallas are opposing Comcast Corp.’s bid for total rate deregulation, claiming the cable operator has not demonstrated that the market is competitive under federal regulations.
Comcast filed a petition for effective competition with the Federal Communications Commission Nov. 15. If deregulated, the MSO would not need local approval of rates charged for set-top boxes, remote controls and basic-tier programming.
“Comcast wants the benefit of deregulation, but it does not want to expend the effort to prove its case. Instead, it asks the [FCC] to act based on hearsay and innuendo. That request should be rejected,” Dallas told the FCC in a Dec. 2 filing.
Comcast has about 136,000 subscribers in Dallas, the country’s seventh-largest TV market.
A Comcast spokesman declined to comment on the city’s opposition.
The MSO is entitled to full rate deregulation if it can demonstrate that its pay TV competitors combined serve more than 15% of households in the Dallas franchise area. Comcast claimed that competitor penetration is 17.6%.
In their filing, Dallas regulators urged rejection, claiming that Comcast relied on either outdated or flawed data. For example, the city said, Comcast included direct-broadcast satellite subscribers with Dallas billing addresses even though they actually reside outside city limits.
“Comcast’s flawed methodology artificially inflates its penetration percentage,” Dallas said, adding that after rejecting the petition, the FCC should bar Comcast from refiling for at least one year.
In its filing, Comcast said DBS services provided by EchoStar Communications Corp. and DirecTV Inc. were widely known to Dallas consumers — and data derived from private and governmental sources demonstrated that DBS penetration exceeded 15% in the market.
Congress deregulated expanded-basic rates effective March 31, 1999, but kept basic rates regulated until a cable system could demonstrate effective competition.
The basic tier includes local TV stations, public-access channels and any cable networks that systems opt to include. Subscribers must buy the basic tier.
WANT STATE ACTION
DBS operators are neither rate-regulated nor required to sell local TV stations. DBS subscribers are not required to buy basic tiers of programming.
The cable industry has been pressing the FCC to abandon the system of evaluating the status of effective competition on a franchise-by-franchise basis.
Comcast and the National Cable & Telecommunications Association have proposed the deregulation of cable systems in any state with DBS penetration that exceeds 15%. Local governments in such states would have to shoulder the burden of proving to the FCC that the 15% standard had not been met in their communities.
The U.S. has 41 states with at least 15% DBS penetration, according to the NCTA.