NAB, others sue to block FCC's ruling on 'effective competition' for cable operators

The National Association of Broadcasters, the National Association of Telecommunications Officers and Advisors (NATOA) the local Minnesota Franchise Authority have filed suit in federal court in order to stop a June "effective competition" ruling, which presumes competition for cable operators in every market.

The ruling ended the ability of states, cities and other local authorities to force cable operators to prove they have competition in their market in order to avoid rate regulation. Previously, operators had to seek recourse with the FCC to escape local rate regulation.

Now, however, with the FCC now presuming competition to cable from satellite operators DirecTV (NYSE: T) and Dish Network (NASDAQ: DISH) in virtually every market, these requests are almost always granted. Indeed, the agency has disallowed only four of 224 requests since 2013.

"In our view, the commission's decision -- made over the objection of two commissioners -- was bad for consumers and wrong on the law," said Scott Goodwin, associate general counsel of NAB, and Steve Traylor, executive director and general counsel of NATOA, in Friday's blog post.

"Unfortunately, this action appears to be only the first step that the commission may take that gives cable operators -- yes, cable operators -- more leeway in and less oversight over their customer service."

The lobbying orgs simultaneously expressed concern about FCC Chairman Tom Wheeler's recent proposal to end exclusivity in broadcast retransmission talks. Exclusivity rules restrict pay-TV operators from accessing alternative network affiliates in distant locales when talks with local stations break down.

"Not only did the FCC vote to disable an important check on cable companies at the local level, but now it is weighing whether to dismantle part of our nation's localized system of broadcasting, which ensures that every local community has relevant news and information available to them," the broadcast lobbying orgs said. "This trend is even more disturbing in light of cable's rapid consolidation and truly dismal customer service record."

For more:
- read this joint blog post from the NAB and National Association of Telecommunications Officers and Advisors (NATOA)

Related articles:
FCC proposal would presume satellite competition in every market
Amid pay-TV's biggest station blackout ever, Dish handily beat Sinclair in perception
FCC vote ends local regulation of cable rates

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