City Government
How
is the Cable Television Industry Regulated
CONTENTS
- Introduction
- Federal
Regulation
- Rate
Regulation
- Carriage
of Broadcast Television Signals
- Nonduplication
of Network Programming
- Deletion
of Syndicated Programming
- Registration
Procedure and Reporting Requirements
- Technical
Requirements
- Utility
Pole Attachments
- Regulatory
Fees
- Technical
Availability of Services
- Franchise
Fees and Obligations
- Franchises/Renewals
- Channels
for Public, Education, Government and Commercial Leased Access
- Ownership
Restriction
- Copyright
- Additional
Obligations
- State and Local Regulation
Cable Television is one of the most regulated businesses in the United States, subject to federal statutes, the Federal communications Commission (FCC), some state governments, and substantially all local governments. The following document provides you with an overview of how regulation works and highlights the major requirements.
The Communications Act of 1934, the Cable Communications Policy Act of 1984, the Cable Television Consumer Protection and Competition Act of 1992, the Telecommunications Act of 1996 and the Rules and Regulations of the FCC provide a comprehensive set of federal requirements governing the operation of the cable systems.
The FCC may enforce the requirements and regulations through imposition of substantial fines, the issuance of cease and deist orders and/or the imposition of other administrative sanctions, such as the revocation of FCC licenses used in connection with cable operations.
Cable television systems are subject to regulation of their subscriber rates. The FCC has adopted a set of regulations for determining reasonable rates. Local franchising authorities are empowered to enforce the basic tier rates and regulation of those rates remains in effect until a cable system becomes subject to "effective competition" (a level of competition set by federal law). As of March 31, 1999, there is no regulation of higher tiers of service, such as "expanded basic service" premium or pay-per-view service.
FCC regulations also dictate the reasonable price for installation of cable service, remote controls, converter boxes and additional outlets, and restrict the rearrangement of cable services. Small cable systems are exempt from many of these requirements. Some larger cable companies have entered into "social contracts" with the FCC that resolve outstanding rate complaints and set company-wide conditions for future rates.
Carriage of Broadcast Television Signals
Cable systems are required to carry certain television broadcast signals. Every three years, commercial stations that are local to the cable system elect either to require the system to carry the station on a "must carry" (mandatory) basis, or to require the system to negotiate for "retransmission consent" (an agreement to carry for payment or other compensation). Cable systems must obtain retransmission consent for the carriage of all "distant" commercial broadcast stations, except for certain "superstations." Local, non-commercial television stations also have mandatory carriage rights. However, unlike commercial stations, non-commercial stations so not have the option to negotiate retransmission consent for the carriage of their signal.
Nonduplication of Network Programming
Cable systems that have 1,000 or more customers must, upon the appropriate request of a local television station, delete the simultaneous or non-simultaneous network programming of a distant station, when such programming has also been contracted for by the local station on an exclusive basis.
Deletion of Syndicated Programming
Stations that have exclusive distribution rights for syndicated programming in their market can require a cable system "black out" (delete) such programming from other distant television stations which are carried by the cable system.
Registration Procedure and Reporting Requirements
Prior to commencing operation in a particular community, cable systems must file a registration statement with the FCC listing the broadcast signals they will carry and certain other information. Additionally, cable operators periodically are required to file various informational reports with the FCC.
Federal technical standards are applicable to all cable systems which carry National Television System Committee (NTSC) video programming. Additional standards apply to systems using frequencies in the 108-137 MHz and 225-400 MHz bands, in order to prevent harmful interference with aeronautical navigation and safety radio service. Limits are also imposed on cable system signal leakage.
The rates, terms and conditions imposed by certain public utilities for cable attachments to their poles are regulated under the Federal Pole Attachment Act or, if a state has asserted jurisdiction, by its public utilities commission. The rates, terms and conditions governing charges for attachments used when cable systems provide telecommunications services also are regulated, if the parties cannot reach agreement on them.
A cable system is required to pay an annual federal regulatory fee based on total number of subscribers and for each FCC license it holds.
Technical Availability of Services
Cable systems not subject to "effective competition" must permit customers to purchase video programming that is offered on a per-channel or a per-event basis without the necessity of subscribing to any tier or service other than the basic service tier, unless the system is technically incapable of doing so. Generally, all systems must become technically capable of complying with the requirement by December 2002.
Systems generally are prohibited from scrambling program signals carried on the basic tier. Systems must install and activate equipment necessary to override channels with audio and video Emergency Alert System messages. Systems must assure that all programming is closed captioned as required by the FCC’s phase-in schedule.
Franchise Fees and Obligations
Local franchising authorities may impose franchise fees of up to 5% of a cable system’s annual gross revenues and, in awarding new franchises, may require cable operators to provide cable-related facilities and equipment.
All cable systems are required to have a local or state franchise (or equivalent) prior to commencing operations. Franchises may not be exclusive. Either the cable operator or the franchising authority may invoke formal franchise renewal procedures.
Channels for Public, Education, Government and Commercial Leased Access
Local Franchising authorities may require cable operators to set aside a portion of their channels for public, educational and governmental access programming. Systems with 36 or more activated channels must designate a portion of their channel capacity for commercial leased access by unaffiliated third parties. The rates, terms and conditions for leased access are set according to FCC regulations.
Cable operators generally are prohibited from owning or operating a local television broadcast station. Ownership of local MMDS facilities and SMATV systems is restricted. Also, no cable operator may hold an attributable interest in cable systems which pass more than 30% of all homes nationwide. (This restriction has been stayed pending appeal.) The number of channels on a cable system that can be occupied by programming in which the system owner has an attributable interest is limited to 40% of all activated channels.
Cable systems must register with the Copyright Office and make semi-annual payments as a condition of carrying television broadcast stations.
Federal law and FCC regulations also address the following areas:
- Cross ownership of cable television and other communication businesses;
- DBS system ownership and operation;
- Local origination and political cablecasting;
- Carriage of local sports programming and indecent programming;
- Program content rating and parental control devices;
- Customer service standards and consumer protection;
- Maintenance of records, filing and notices;
- Equal Employment Opportunity (EEO);
- Home writing and inside wiring in multiple dwelling unit buildings;
- Equipment standards and compatibility
Because a cable system uses local streets and right-of-way, it is subject to state and local regulation, typically imposed through the franchising process. Consistent with the Communications Act, state and/or local official are usually involved in franchise selection, system design and construction, safety, service rates, consumer relations, billing practices, and community related programming and services.
Cable franchises generally contain provisions governing charges for basic cable television services, fees paid to the franchising authority, length of the franchise term, renewal, sale or transfer of the franchise, territory of the franchise, design and technical performance of the system, use and occupancy of public streets, and the number and types of cable services provided.
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