Cobb County does not have authority to regulate basic tier cable rates. Although the Federal Communications Commission currently permits some local governments to regulate and approve pricing for cable services, this practice is limited to communities with only one provider or which limit the number of providers allowed to serve a geographical area.
Cobb County currently has three cable television providers, including a local exchange carrier (BellSouth Entertainment) and access to satellite home programming. These factors prevent Cobb County from qualifying for rate controls.
The FCC has a fact sheet on their web site for consumers that provides the requirements to determine if a local franchise authority (i.e. Cobb County) can regulate rates. Here is an excerpt:
Rates for a cable system's service tiers and associated equipment may be regulated only if the cable system is not subject to effective competition. There are four separate tests to establish that effective competition exists:
- The households subscribing to a cable system constitute fewer than 30 percent of the households in its franchise area; or
- (a) there are at least two unaffiliated multichannel video programming distributors (one of which may be the cable system in question), with each offering comparable video programming to at least 50 percent of the households in the franchise area, and (b) the households subscribing to all but the largest multichannel video programming distributor exceed 15 percent of the households in the franchise area; or
- The franchising authority is itself a multichannel video programming distributor offering video programming to at least 50 percent of the households in the franchise area; or
- A local exchange carrier or its affiliate (or any multichannel video programming distributor using the facilities of such carrier or its affiliate) offers video programming services directly to subscribers by any means (other than direct-to-home satellite services) in the franchise area, but only if the video programming services so offered in that area are comparable to the video programming services provided by the unaffiliated cable operator in that area. In the absence of a demonstration to the contrary, a franchising authority may presume that a cable system is not subject to effective competition.
Cobb County Government is prevented from rate controls based on the availability of BellSouth Entertainment programming and the availability of satellite programming to county residents.
The FCC confirmed this position July 2000 in FCC Order DA-1672. In this order, MediaOne, now Comcast, filed a petition with the FCC to have basic tier rate controls revoked for most franchise authorities in Metro Atlanta. Cobb County was one of the communities impacted by the order. Here is an excerpt:
MediaOne has also shown that BSE (BellSouth Entertainment) has commenced providing service not only within the Communities but also within several other nearby communities within the greater Atlanta area, is marketing its services in a manner that makes potential subscribers reasonably aware of those services, and otherwise satisfies the "LEC" effective competition test consistent with evidentiary requirements set forth in the Cable Reform Order. 7. Based on the foregoing, we conclude that MediaOne has submitted sufficient evidence demonstrating that its cable systems serving Atlanta, Georgia and the communities listed in Appendix A are subject to effective competition. _ VIII. ordering clauses 9. Accordingly, IT IS ORDERED that the petition for a determination of effective competition filed by MediaOne of Colorado, Inc. IS GRANTED.