FEDERAL COMMUNICATIONS COMMISSION

FACT SHEET

August 2000

CABLE TELEVISION FACT SHEET

THE CONSUMER'S ROLE IN CABLE RATE REGULATION

Q: Does the Commission regulate all cable television rates?

A: No. This authority is shared between the Commission and your local franchising authority, which is the local city, county, or other government organization that granted the cable operator the right to provide cable service to your community. The name of your local franchising authority may be on your cable bill. If it is not, contact your cable company or your local government.

Q: What do local franchising authorities regulate?

A: In most instances, your local franchising authority is responsible for regulating:

• Rates for basic cable service, equipment used to receive basic cable service, and installation and service charges related to basic cable service. The term "basic cable service" refers to the lowest level of cable service you can buy, and is the program package that includes signals from local television stations (such as ABC, CBS, and NBC affiliates; educational stations; and independent television stations) and public, educational and governmental access channels. Your cable system may use other terms to describe this service.
• Customer service--for instance, complaints about bills, a cable system's response to inquiries about signal quality, and a cable system's response to service requests.
• Franchise fees--the fees paid by the cable system to the franchising authority for the right to offer cable service.

You should contact your local franchising authority, and not the FCC, with complaints regarding rates for basic cable service, customer service and franchise fees.

Q: What cable rates does the FCC regulate?

A: Previously, the FCC regulated the rate you pay for certain programming that the FCC refers to as "cable programming service." "Cable programming service" includes all program channels on your cable system that are not included in basic service and are not separately offered as pay-per-channel programming or pay-per-program services.

However, the Telecommunications Act of 1996 ("1996 Act") terminated the FCC's authority to regulate the rate you pay for cable programming service. Pursuant to the 1996 Act, the FCC's authority to regulate cable rates was terminated for cable programming service provided after March 31, 1999. Therefore, the rate you pay for cable programming service is determined by the cable company and cannot be reviewed or modified by the FCC. Any questions you have regarding the cable programming service rate should be discussed with the cable company.

Q: Are there some rates that neither the FCC nor local franchising authorities regulate?

A: Yes. Neither the FCC nor your local franchising authority regulates rates for pay-per-channel programming (for instance, a premium movie channel such as HBO or Showtime) and pay-per-program services (for instance, pay-per-view sports events). This means that your cable company may charge what it chooses for these services.

Q: How are the rates of my cable company regulated?

A: Your local franchising authority regulates the rates for the basic service tier. The rate regulations your local authority enforces are regulations the FCC has adopted. Basically, the FCC has established a benchmark system for use by the local authorities in their determinations of rate reasonableness. Under the benchmark system, a cable operator's rates are compared to a set of rates designed to approximate the rates that a cable operator facing competition would charge. If a cable company believes that its rates must be permitted to exceed the benchmark, it can elect to justify higher rates by making a cost of service showing. This is a more complicated method for determining the reasonableness of a cable company's rates and is based on the company's higher costs of providing service. If the cable company can make the case that its higher costs require higher rates, its rates will be allowed to exceed the benchmark.

Per-channel or per-program services, which are those services for which the cable system charges a separate fee, as stated above, are not subject to rate regulation.

Q: May my local franchising authority begin immediately to regulate my cable system's basic rates?

A: No. In order to exercise its authority to regulate basic cable rates, your local franchising authority must be certified to do so by the Commission. Your local franchising authority must certify to the Commission that it has the legal authority and the personnel necessary to regulate rates, that it will adopt rules consistent with Commission rules governing the basic service tier, and that it will adopt procedural rules providing for notice and comment in rate regulation proceedings. Your franchising authority's certification becomes effective 30 days after it is filed with the Commission, unless the Commission notifies your franchising authority to the contrary. Your franchising authority must adopt the rules referred above within 120 days of certification.

The Commission will not intervene to regulate basic cable service rates should your local franchising authority choose not to seek certification from the Commission.

Q: How do I file a complaint about my cable rates?

A: Pursuant to the 1996 Act, only the basic cable rate is regulated. Because the local franchise authority has the jurisdiction to regulate this rate, any questions you have about this rate should be discussed with your local franchise authority.

Q: How can I obtain copies of the Commission's cable regulations?

A: Due to budgetary considerations, the Commission does not supply free copies of its regulations. You can purchase copies of the Commission's decisions and specific regulations by calling International Transcription Service ("ITS") at (202) 857-3800. When you call ITS, ask for cable regulations and specify whether you want information regarding rates or other areas. You may also obtain copies of Commission documents and other information at the Commission's web site: http://www.fcc.gov/. If you wish to purchase copies of the 1992 Cable Act, the entire Communications Act, or Commission rules and regulations, call the Government Printing Office ("GPO") at (202) 512-1800. There may also be a GPO outlet in a major city close to you. The FCC's cable television rules and regulations are contained in Title 47 of the Code of Federal Regulations, Part 76.

Q: How can I obtain further information from the Commission?

A: The following mailing address may be used: Cable Services Bureau, General Cable Inquiries, 445 12th Street, S.W., Washington, D.C., 20554. General inquiries should be directed to the Federal Communications Commission, 1-888-225-5322 (1-888-CALLFCC). This is a toll free call. Commission offices are normally open from 8:00 a.m. to 5:30 p.m., Monday through Friday, excluding federal legal holidays.

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