FCC commissioners voted 5-0 Monday to move forward with a proposal that would end a requirement that cable operators prove they have competition from satellite operators in order to avoid rate regulation.
Established more than 20 years ago in an age before DirecTV (NASDAQ: DTV) and Dish Network (NASDAQ: DISH) covered 99 percent of the U.S., the Cable Act assumed MSOs operated in specific markets without competition unless they could prove otherwise.
"Today's MVPD marketplace is markedly different," noted an astute FCC memo.
Currently, cable operators have to petition the FCC and prove they have competition from satellite in order to avoid rate regulation. The vast majority of those requests are granted
The FCC's Notice of Proposed Rulemaking would flip that burden on its ear, requiring local franchising entities to prove an MSO doesn't have competition before executing on rate regulation. The move would benefit smaller cable operators, liberating them from what is an unnecessary additional layer of bureaucracy.
The FCC is seeking comment as to whether DirecTV and Dish do provide comprehensive competition.
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