USA - cable competition rules

FCC Clarifies Cable Competition Rules

As cable companies continue to apply for, and generally receive, determinations of effective competition from the FCC granting them more pricing flexibility, the FCC has announced new standards for the data required to be submitted for a determination to be granted. In line with the more refined data now collected for the FCC competition, determinations will move from five digit zip codes to use data at 'Zip code Plus Four' level of granularity, showing that the number of households in an area subscribing to other video providers exceeds 15%.

Significance: It was noted that the larger zip code areas had on occasion produced spurious results (for example, in excess of 100% penetration in a franchise area). This was the case in a Time Warner petition, which was partially successful in gaining regulatory relief in a number of Arizona communities. The same information release from the FCC recorded that Cox Communications was granted a determination of effective competition – though Stafford County had noted that the data was flawed by the size of the sample area. The FCC notes that the cable companies have already largely been using data at this level of granularity. This will make little difference in most competition determinations, but has obviously raised doubts about the validity of some determinations as the cable companies seek greater regulatory flexibility, partly in response to increasing competition from the telcos.