Dereg Filings Could Surge, Cities Fear


Attorneys are warning local cable regulators to prepare for an onslaught of effective-competition filings, now that cable's wave of consolidation is waning and companies are shifting their focus to improving per-subscriber revenues.

But panelists at a session at the recent annual meeting of the National Association of Telecommunications Officers and Advisors here described just how hard it can be for municipalities to fight such filings.

Cities don't have access to the same data that cable companies use to justify their arguments for deregulation, especially with respect to direct-broadcast satellite penetration.

Unlike court cases, where the rules of discovery allow both sides to access to the same data, the Federal Communications Commission relies heavily on statistics provided by the cable industry from SkyTrends.

That market-research, data-collection and reporting firm is a partnership of companies including DirecTV Inc., EchoStar Communications Corp. and programming networks. Its contracts limit access to information to member companies and the cable industry.

The FCC "improperly delegates" authority by relying so heavily on SkyTrends, said Scott Robin of the law firm for Weiss, Serota, Helfman, Pastoriza and Guedes P.A. The FCC doesn't independently audit any of the private company's data, he added, calling that a "scandalous thing."

City officials complain that SkyTrends data track penetration by ZIP codes, not franchise boundaries; count receivers instead of homes; and lump commercial accounts in with residential numbers.

SkyTrends chairman Paul Maxwell said his firm uses ZIP-plus-four statistical blocks, which collates data down to the city block. "That's as close to the franchise area as you can get," he said. "If they think SkyTrends is bad, look at Nielsen numbers. They're all based on projections."

EchoStar, DirecTV and the Motorola Authorization Center provide SkyTrends with billing tapes each month, Maxwell said. Those sources remove such things as postal-box addresses and commercial accounts.

The data generated is "as close as you can get to reality," Maxwell said.

City officials said even the timing of the process can doom an effective challenge. Cities have 20 days from notification to file opposition, and officials said it takes most municipalities that long to wrestle research funds from their cable advisory boards.

Attorneys recommend cities prepare in advance for effective-competition filings, especially as the National Cable & Telecommunications Association has suggested such rulings be made statewide, rather than community by community.

Brian Grogan of the law firm Moss & Barnett warned that in effective-competition markets, cities lose control over tier buy-through provisions, citywide uniform rate structures and negative-option tactics. In the absence of opposition, he said, cable will be deregulated.

"If you don't oppose them, what are you saying to your communities?" Grogan asked.