Charter’s bid to have vMVPDs defined as ‘effective competition’ heads to FCC vote

FCC Chairman Ajit Pai
FCC Chairman Ajit Pai (FCC)

Streaming TV services like AT&T TV Now (formerly DirecTV Now) could soon be considered “effective competition” for cable operators like Charter.

Under current rules, regulation of basic cable rates is only permitted in those areas where there is not effective competition in the video marketplace. For Charter, those regulations are applied in parts of Massachusetts and Hawaii. But the FCC could soon decide that AT&T TV Now represents enough competition for Charter in those markets that rate regulation is no longer needed.

“In three weeks, the Commission will vote on an order that would agree Charter is now subject to effective competition from AT&T’s streaming service. Adopting this order would be a major step toward the Commission recognizing the realities of the modern video marketplace, and the increasingly important role that streaming services are playing in it,” wrote FCC Chairman Ajit Pai in a blog post.

RELATED: Charter slapped with $174M consumer fraud settlement in New York

In April, representatives from Charter met with FCC officials to discuss legal and policy arguments in support of AT&T TV Now satisfying the effective competition test.

Charter argued that the requirement that a local exchange carrier (LEC) affiliate offer comparable video programming services “directly to subscribers” means that the LEC affiliate must have (or offer to have) a direct customer relationship with consumers in the franchise area.

“We noted that interpreting ‘directly to subscribers’ to mean that a LEC affiliate must use its own facilities to provide service, as opponents have suggested, contradicts the statutory directive that the LEC Test may be satisfied ‘by any means’ other than direct-to-home satellite,” wrote Charter in an ex parte filing.

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