February 22, 1994 FCC FILES BRIEF CHALLENGING REQUEST FOR STAY OF FREEZE ON CABLE REVENUES The FCC today opposed efforts by Intermedia Partners (Intermedia) and the Cable Telecommunications Association (CATA) to require the FCC to lift its freeze on cable television rate increases. On February 11, 1994, Intermedia and CATA filed an Emergency Motion for Stay and Injunctive Relief requesting the U.S. Court of Appeals to stay the FCC's decision to extend the freeze on cable television rate increases until May 15, 1994, when new rate regulations announced today will have become effective. If the stay were granted, it would permit cable companies to charge their subscribers higher rates before the new rules become effective. In its opposition to the Emergency Motion, the FCC argued that the stay is essential to protect consumers from unreasonable rate increases until cities and other franchising authorities have the opportunity to begin regulating basic cable rates under the rules announced today. The FCC's opposition also notes that Intermedia and CATA failed to demonstrate to the court that the extension of the freeze has caused them irreparable harm sufficient to justify the extraordinary relief requested. The FCC told the court that, at best, the petitioners have shown only that the freeze may have caused "narrowing profit margins previously established in an unregulated, typically monopoly, environment." The FCC also pointed out that it has repeatedly announced that it would entertain petitions for waiver of the freeze, in individual cases, in which cable operators can demonstrate that the freeze is causing severe hardship or threatens the viability of continued provision of cable service. Of approximately 11,000 cable operators, only five have filed such petitions; none were filed by the petitioners in this case. (over) -2- The FCC also argued in its opposition that the petitioners have overlooked the important public interest benefits of the freeze. The FCC stated that "Petitioners...give no consideration to the disruptive effect on both local franchising authorities and cable subscribers of lifting the freeze before the rate regulation rules have been finalized." Several organizations representing cities and other franchising authorities filed briefs in support of the FCC's position today, including the National League of Cities, the National Association of Telecommunications Officers and Advisors, the National Association of Counties and the state attorneys general of the states of Arkansas, Connecticut, Delaware, Hawaii, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Hampshire, Oregon, Pennsylvania, Rhode Island, South Carolina, Vermont and Florida. In addition, the New York Attorney General filed separately. -FCC- News Media contact: Susan Lewis Sallet at (202) 632-5050. Office of the General Counsel contact: Richard Welch at (202) 632-6990.