Source: Dems Not Backing Effective-Competition Change

FCC Chair Wheeler Needs Republican Vote(s)

With a June 2 deadline from Congress for an order streamlining its effective-competition petition process, a federal Communications Commission source speaking on background at press time said three votes had been cast on the effective-competition order, and another source said they did not include the two Democrats -- commissioners Mignon Clyburn and Jessica Rosenworcel.

FCC chairman Tom Wheeler circulated the order, and the Republicans support it, while an FCC source said Clyburn would not be voting to approve, and Rosenworcel likely will not support it either.

The order is expected to be voted by the other two commissioners by June 2 and pass 3-2 in a split decision.

Currently, to get out from under basic-cable rate regulation, a cable operator has to petition the FCC for a ruling that it is subject to effective competition. As part of the STELAR satellite license reauthorization bill, Congress directed the FCC to come up with a streamlined effective competition process for smaller, particularly rural, operators. But since the FCC has granted ll such requests, in whole or in part, since 2103. The FCC in March proposed reversing it for all cable operators and the chairman circulated an order to that effect.

Republican commissioners support the move, but a source speaking on background said that Commissioner Mignon Clyburn would not be able to support reversing the presumption, citing the potential impact on consumers of a broad change in the presumption. The source also said commissioner Jessica Rosenworcel was of like mind. Rosenworcel's office had not returned a request for comment at press time, and Clyburn's office had no comment.

A Democratic division means that unless the chairman changes his mind on the item he circulated, or it is amended somehow at the 11th hour to make it more palatable to one of more Dems, the Republicans hold the key votes.

Of course it is not as though Democrats elsewhere weren't also split over the plan.

Broadcasters have been pushing back hard, but so have a number of high-profile Democratic senators and public interest groups, as well as the local franchising authorities that will lose rate regulation authority. But not all Democratic legislators oppose the move. Ranking House Communications Subcommittee member Anna Eshoo (D-Calif.) joined with Republican Steve Scalise (La.) to support the FCC's proposal to "update" the effective competition provision. They pointed to legacy regulation as an impediment to enhanced flexibility and choice — the presumption dates from the 1992 Cable Act, which dates from a time when cable ops had a 95% MVPD market share, which is now a tad over 50%.

Back in April, the FCC's Media Bureau denied a petition by the National Association of Broadcasters and Public Knowledge to narrow the scope of its decision, saying Congress never meant it to reverse the presumption and certainly not for all operators, when it told the FCC to streamlining the process for smaller operators.

If it is a 3-2 vote, with two Democrats taking the other side, it will be the first such needed cross-party majority of the chairman's tenure.