Philly.com, TVNewsCheck

Over Objections From Broadcasters, FCC Kills Off Cable Price Regulation

Jun 4, 2015  •  Post A Comment

In a move that was opposed by the broadcast industry, the Federal Communications Commission has effectively ended its regulation of cable prices.

Philly.com reported Wednesday that the FCC “drove the final stake today into the last vestige of cable price regulation: rules that allowed cities and municipalities to limit the price of barebones ‘basic cable’ and equipment rentals unless a cable company applied for a declaration that it was subject to ‘effective competition’ in that locality. … The FCC gave the cable industry what it wanted: The whole country will now be considered subject to ‘effective competition’ by default, unless a local franchise authority steps forward to argue otherwise.”

TVNewsCheck notes that the ruling “came over the objections of the NAB, which is concerned that the deregulated systems will now be able to move broadcast signals out of basic service tiers.

“Broadcasters and other opponents of the FCC action ‘have not pointed to a single instance in which cable operators have even attempted to move broadcast stations … off the basic service,’ the FCC said in its 3-2 ruling.”

The TVNewsCheck report notes that the FCC responded to the objections of broadcasters saying, “We do not believe that they provide a sound basis to retain rules that are no longer justified by marketplace realities and that place unwarranted burdens on cable operators and the commission.”

The report quotes NAB spokesman Dennis Wharton saying: “The FCC decision clearly contradicts language expressly written into statute by Congress just six months ago in the satellite TV bill.

“Moreover, it’s disappointing and surprising that as cable customer satisfaction ratings plunge to a record low, the FCC believes it is wise to gut the one protection that allows local municipalities a chance to protect consumers from abusive treatment and consistently skyrocketing rates.”



  1. Just what the cablers wanted. So now they can raise their rates again, to counter their losses to cord cutters. But that will probably just drive their approval ratings further into the toilet, and drive more subscribers away. This move is good for the cable companies, and as usual, bad for everyone else. And, as we see in so many other businesses, good for the bottom line in the short term, with no looking at the long term.

  2. Don’t forget it’s also good for the content providers (I’m looking at you, ESPN) who keep asking for more money per subscriber when retrans agreements need to be renewed.

  3. It may also allow cable and satellite companies to offer ala carte, which is the only thing that will make them competitive in the future. It is the only way they can survive long term. They can’t continue being in the middle taking the flak for companies like ESPN that force customers to buy all of their channels. The average consumer has no idea how this system works and who should really take the blame for their rate increases.

  4. Understand the reason why the cost of cable has gone up is mostly because of the broadcasters and the satellite networks!! Cable companies used to get the broadcast channels for $0 just like homeowners with off-air antennas. Now that cost in just the past few years has gone from $0 per channel, per subscriber, per month to around $2 per channel, per subscriber, per month. This cost is referring to your local ABC, CBS, FOX, NBC, etc. Each of those channels cost around $2 per monthSatellite networks like Disney/ESPN, Viacom (VH1, CMT, NICK, etc.), Discovery Networks, etc. pretty much always force cable companies to sign long term contracts (5 yrs.) with steadily increasing programming fees from year to year. In some cases, new channel launches are included in those contract negotiations which forces cable companies to add NEW channels whether the cable company wants them or not. A recent contract that was signed by a large number of cable companies a year ago would force the cable companies to pay that provider more than double over a 5 yr. period. And that was after a very long negotiation period that lasted a number of months over just (7) channels.

    A la carte is not likely to happen anytime soon until satellite networks word their contracts to allow cable providers to do. Most satellite networks contracts force cable companies to pass 80% of their entire subscriber base with most of their channel lineup. Cable companies, in most instances, do not have an option to pick and choose what channels they can offer their subscribers. Satellite networks, in most cases, have an all or none attitude forcing cable operators to offer a suite of channels which cable operators have to pass on to their subscribers. Other contracts force cable operators to treat all channels in a similar fashion meaning that all sports programming has to be offered to ALL cable subscribers regardless of whether or not that customers wants sports programming or not. The cost of just ESPN alone, (1) channel, is around $5 to $6 per subscriber, per month. That is what the cable company has to pay ESPN per subscriber, per month for that (1) channel!!

    Look at the new Sony Vue service that lacks programming like ESPN. That reason maybe because ESPN is the most expensive expanded cable channel there is and that would drive the cost of the Vue service up $6 to $10 a month. Sony Vue, may not be able to add ESPN in its own sports tier, because then they would be discriminating against cable companies where they force them to include ESPN, ESPN 2, etc. in the expanded cable lineup and pass that 80% subscriber base.

    We will see if Apple includes ESPN in their rumored direct to the customer channel lineup that could possibly be announced next week if the rumored new Apple TV is unveiled.

  5. Les understands how it works. Scott does not.

    Scott, cable providers have little to no incentive to raise rates at the current rate increase levels. If you want a culprit, look to the programmers. Every contract renewal contains typical high single to double digit rate increases combined with forced add B and C level networks (SEC, ID, FS2, Esquire, etc, etc) with additional programming costs. Penetration requirements force more and more networks on to Expanded Basic guaranteeing programmers a revenue stream for these minor channels.

    Cable providers would prefer to NOT add more programming resulting in lower ops costs, lower administrative costs, lower support costs and use the money elsewhere. It also means lower costs to the consumers. Cable providers want more flexibility to say no to minor programming and keep costs down for us an the consumer.

    Small cable operator.

Your Comment

Email (will not be published)