PRIA, Government Policy, Made Personal

Summary

The law says who can control cable TV prices and when. Only the Federal Communications Commission (FCC) or local franchising authorities can set cable rates, and only as this law allows. If the FCC finds a cable system faces "effective competition," then no one may regulate its rates. If not, local authorities (or the FCC in some situations) can regulate the basic service tier, and the FCC can regulate rates for other cable programming. A local franchising authority must file a written certification that it will follow FCC rules, has legal power and staff, and lets people be heard. The FCC has 30 days after the filing to disapprove, and if it does or later revokes authority, the FCC will take over until the local authority fixes its certification (the FCC must act on a new filing within 90 days). The FCC must make rules to keep basic tier rates reasonable and to set fair charges for equipment and extra connections. It will consider costs, advertising revenue, franchise fees, required public channels, and a reasonable profit. Cable operators must give 30 days’ notice before raising basic tier prices. The basic tier must include required broadcast signals and required public, educational, and government channels. Operators may not force customers to buy other tiers to get pay-per-channel programming, except when the system cannot technically offer per-channel sales; that exception ends after 10 years from October 5, 1992 or when technology is fixed, unless the FCC grants a waiver. The FCC must also make rules to find and fix unreasonable programming rates, stop evasions, and require yearly financial filings. Operators cannot bill customers for services they did not explicitly ask for. Small systems and small cable operators get lighter regulation (special thresholds include 1,000, 50,000, 1% of U.S. subscribers, and $250,000,000 in affiliate revenue). The FCC must allow grouping of equipment costs (with a rule update due within 120 days of February 8, 1996). The FCC must create a streamlined process for small operators to file effective-competition petitions within 180 days after December 4, 2014. The FCC’s rules limiting review of upper-tier programming rates ended March 31, 1999. Losses from before September 4, 1992 by an original franchisee may still be counted when judging lawful rates. Definitions: "effective competition" (tests for when competition exists) and "cable programming service" (video programming over cable that is not basic tier or per-channel/per-program).

Title 47, §543

Telegraphs, Telephones, and Radiotelegraphs, Source: USLM XML via OLRC

(a)Competition preference; local and Federal regulation

(1)In general

No Federal agency or State may regulate the rates for the provision of cable service except to the extent provided under this section and section 532 of this title. Any franchising authority may regulate the rates for the provision of cable service, or any other communications service provided over a cable system to cable subscribers, but only to the extent provided under this section. No Federal agency, State, or franchising authority may regulate the rates for cable service of a cable system that is owned or operated by a local government or franchising authority within whose jurisdiction that cable system is located and that is the only cable system located within such jurisdiction.

(2)Preference for competition

If the Commission finds that a cable system is subject to effective competition, the rates for the provision of cable service by such system shall not be subject to regulation by the Commission or by a State or franchising authority under this section. If the Commission finds that a cable system is not subject to effective competition—

(A)the rates for the provision of basic cable service shall be subject to regulation by a franchising authority, or by the Commission if the Commission exercises jurisdiction pursuant to paragraph (6), in accordance with the regulations prescribed by the Commission under subsection (b); and

(B)the rates for cable programming services shall be subject to regulation by the Commission under subsection (c).

(3)Qualification of franchising authority

A franchising authority that seeks to exercise the regulatory jurisdiction permitted under paragraph (2)(A) shall file with the Commission a written certification that—

(A)the franchising authority will adopt and administer regulations with respect to the rates subject to regulation under this section that are consistent with the regulations prescribed by the Commission under subsection (b);

(B)the franchising authority has the legal authority to adopt, and the personnel to administer, such regulations; and

(C)procedural laws and regulations applicable to rate regulation proceedings by such authority provide a reasonable opportunity for consideration of the views of interested parties.

(4)Approval by Commission

A certification filed by a franchising authority under paragraph (3) shall be effective 30 days after the date on which it is filed unless the Commission finds, after notice to the authority and a reasonable opportunity for the authority to comment, that—

(A)the franchising authority has adopted or is administering regulations with respect to the rates subject to regulation under this section that are not consistent with the regulations prescribed by the Commission under subsection (b);

(B)the franchising authority does not have the legal authority to adopt, or the personnel to administer, such regulations; or

(C)procedural laws and regulations applicable to rate regulation proceedings by such authority do not provide a reasonable opportunity for consideration of the views of interested parties.

If the Commission disapproves a franchising authority’s certification, the Commission shall notify the franchising authority of any revisions or modifications necessary to obtain approval.

(5)Revocation of jurisdiction

Upon petition by a cable operator or other interested party, the Commission shall review the regulation of cable system rates by a franchising authority under this subsection. A copy of the petition shall be provided to the franchising authority by the person filing the petition. If the Commission finds that the franchising authority has acted inconsistently with the requirements of this subsection, the Commission shall grant appropriate relief. If the Commission, after the franchising authority has had a reasonable opportunity to comment, determines that the State and local laws and regulations are not in conformance with the regulations prescribed by the Commission under subsection (b), the Commission shall revoke the jurisdiction of such authority.

(6)Exercise of jurisdiction by Commission

If the Commission disapproves a franchising authority’s certification under paragraph (4), or revokes such authority’s jurisdiction under paragraph (5), the Commission shall exercise the franchising authority’s regulatory jurisdiction under paragraph (2)(A) until the franchising authority has qualified to exercise that jurisdiction by filing a new certification that meets the requirements of paragraph (3). Such new certification shall be effective upon approval by the Commission. The Commission shall act to approve or disapprove any such new certification within 90 days after the date it is filed.

(7)Aggregation of equipment costs

(A)In general

The Commission shall allow cable operators, pursuant to any rules promulgated under subsection (b)(3), to aggregate, on a franchise, system, regional, or company level, their equipment costs into broad categories, such as converter boxes, regardless of the varying levels of functionality of the equipment within each such broad category. Such aggregation shall not be permitted with respect to equipment used by subscribers who receive only a rate regulated basic service tier.

(B)Revision to Commission rules; forms

Within 120 days of February 8, 1996, the Commission shall issue revisions to the appropriate rules and forms necessary to implement subparagraph (A).

(b)Establishment of basic service tier rate regulations

(1)Commission obligation to subscribers

The Commission shall, by regulation, ensure that the rates for the basic service tier are reasonable. Such regulations shall be designed to achieve the goal of protecting subscribers of any cable system that is not subject to effective competition from rates for the basic service tier that exceed the rates that would be charged for the basic service tier if such cable system were subject to effective competition.

(2)Commission regulations

Within 180 days after October 5, 1992, the Commission shall prescribe, and periodically thereafter revise, regulations to carry out its obligations under paragraph (1). In prescribing such regulations, the Commission—

(A)shall seek to reduce the administrative burdens on subscribers, cable operators, franchising authorities, and the Commission;

(B)may adopt formulas or other mechanisms and procedures in complying with the requirements of subparagraph (A); and

(C)shall take into account the following factors:

(i)the rates for cable systems, if any, that are subject to effective competition;

(ii)the direct costs (if any) of obtaining, transmitting, and otherwise providing signals carried on the basic service tier, including signals and services carried on the basic service tier pursuant to paragraph (7)(B), and changes in such costs;

(iii)only such portion of the joint and common costs (if any) of obtaining, transmitting, and otherwise providing such signals as is determined, in accordance with regulations prescribed by the Commission, to be reasonably and properly allocable to the basic service tier, and changes in such costs;

(iv)the revenues (if any) received by a cable operator from advertising from programming that is carried as part of the basic service tier or from other consideration obtained in connection with the basic service tier;

(v)the reasonably and properly allocable portion of any amount assessed as a franchise fee, tax, or charge of any kind imposed by any State or local authority on the transactions between cable operators and cable subscribers or any other fee, tax, or assessment of general applicability imposed by a governmental entity applied against cable operators or cable subscribers;

(vi)any amount required, in accordance with paragraph (4), to satisfy franchise requirements to support public, educational, or governmental channels or the use of such channels or any other services required under the franchise; and

(vii)a reasonable profit, as defined by the Commission consistent with the Commission’s obligations to subscribers under paragraph (1).

(3)Equipment

The regulations prescribed by the Commission under this subsection shall include standards to establish, on the basis of actual cost, the price or rate for— (A)

(B)installation and monthly use of connections for additional television receivers.

(4)Costs of franchise requirements

The regulations prescribed by the Commission under this subsection shall include standards to identify costs attributable to satisfying franchise requirements to support public, educational, and governmental channels or the use of such channels or any other services required under the franchise.

(5)Implementation and enforcement

The regulations prescribed by the Commission under this subsection shall include additional standards, guidelines, and procedures concerning the implementation and enforcement of such regulations, which shall include—

(A)procedures by which cable operators may implement and franchising authorities may enforce the regulations prescribed by the Commission under this subsection;

(B)procedures for the expeditious resolution of disputes between cable operators and franchising authorities concerning the administration of such regulations;

(C)standards and procedures to prevent unreasonable charges for changes in the subscriber’s selection of services or equipment subject to regulation under this section, which standards shall require that charges for changing the service tier selected shall be based on the cost of such change and shall not exceed nominal amounts when the system’s configuration permits changes in service tier selection to be effected solely by coded entry on a computer terminal or by other similarly simple method; and

(D)standards and procedures to assure that subscribers receive notice of the availability of the basic service tier required under this section.

(6)Notice

The procedures prescribed by the Commission pursuant to paragraph (5)(A) shall require a cable operator to provide 30 days’ advance notice to a franchising authority of any increase proposed in the price to be charged for the basic service tier.

(7)Components of basic tier subject to rate regulation

(A)Minimum contents

Each cable operator of a cable system shall provide its subscribers a separately available basic service tier to which subscription is required for access to any other tier of service. Such basic service tier shall, at a minimum, consist of the following:

(i)All signals carried in fulfillment of the requirements of section 534 and 535 of this title.

(ii)Any public, educational, and governmental access programming required by the franchise of the cable system to be provided to subscribers.

(iii)Any signal of any television broadcast station that is provided by the cable operator to any subscriber, except a signal which is secondarily transmitted by a satellite carrier beyond the local service area of such station.

(B)Permitted additions to basic tier

A cable operator may add additional video programming signals or services to the basic service tier. Any such additional signals or services provided on the basic service tier shall be provided to subscribers at rates determined under the regulations prescribed by the Commission under this subsection.

(8)Buy-through of other tiers prohibited

(A)Prohibition

A cable operator may not require the subscription to any tier other than the basic service tier required by paragraph (7) as a condition of access to video programming offered on a per channel or per program basis. A cable operator may not discriminate between subscribers to the basic service tier and other subscribers with regard to the rates charged for video programming offered on a per channel or per program basis.

(B)Exception; limitation

The prohibition in subparagraph (A) shall not apply to a cable system that, by reason of the lack of addressable converter boxes or other technological limitations, does not permit the operator to offer programming on a per channel or per program basis in the same manner required by subparagraph (A). This subparagraph shall not be available to any cable operator after—

(i)the technology utilized by the cable system is modified or improved in a way that eliminates such technological limitation; or

(ii)10 years after October 5, 1992, subject to subparagraph (C).

(C)Waiver

If, in any proceeding initiated at the request of any cable operator, the Commission determines that compliance with the requirements of subparagraph (A) would require the cable operator to increase its rates, the Commission may, to the extent consistent with the public interest, grant such cable operator a waiver from such requirements for such specified period as the Commission determines reasonable and appropriate.

(c)Regulation of unreasonable rates

(1)Commission regulations

Within 180 days after October 5, 1992, the Commission shall, by regulation, establish the following:

(A)criteria prescribed in accordance with paragraph (2) for identifying, in individual cases, rates for cable programming services that are unreasonable;

(B)fair and expeditious procedures for the receipt, consideration, and resolution of complaints from any franchising authority (in accordance with paragraph (3)) alleging that a rate for cable programming services charged by a cable operator violates the criteria prescribed under subparagraph (A), which procedures shall include the minimum showing that shall be required for a complaint to obtain Commission consideration and resolution of whether the rate in question is unreasonable; and

(C)the procedures to be used to reduce rates for cable programming services that are determined by the Commission to be unreasonable and to refund such portion of the rates or charges that were paid by subscribers after the filing of the first complaint filed with the franchising authority under paragraph (3) and that are determined to be unreasonable.

(2)Factors to be considered

In establishing the criteria for determining in individual cases whether rates for cable programming services are unreasonable under paragraph (1)(A), the Commission shall consider, among other factors—

(A)the rates for similarly situated cable systems offering comparable cable programming services, taking into account similarities in facilities, regulatory and governmental costs, the number of subscribers, and other relevant factors;

(B)the rates for cable systems, if any, that are subject to effective competition;

(C)the history of the rates for cable programming services of the system, including the relationship of such rates to changes in general consumer prices;

(D)the rates, as a whole, for all the cable programming, cable equipment, and cable services provided by the system, other than programming provided on a per channel or per program basis;

(E)capital and operating costs of the cable system, including the quality and costs of the customer service provided by the cable system; and

(F)the revenues (if any) received by a cable operator from advertising from programming that is carried as part of the service for which a rate is being established, and changes in such revenues, or from other consideration obtained in connection with the cable programming services concerned.

(3)Review of rate changes

The Commission shall review any complaint submitted by a franchising authority after February 8, 1996, concerning an increase in rates for cable programming services and issue a final order within 90 days after it receives such a complaint, unless the parties agree to extend the period for such review. A franchising authority may not file a complaint under this paragraph unless, within 90 days after such increase becomes effective it receives subscriber complaints.

(4)Sunset of upper tier rate regulation

This subsection shall not apply to cable programming services provided after March 31, 1999.

(d)Uniform rate structure required

A cable operator shall have a rate structure, for the provision of cable service, that is uniform throughout the geographic area in which cable service is provided over its cable system. This subsection does not apply to (1) a cable operator with respect to the provision of cable service over its cable system in any geographic area in which the video programming services offered by the operator in that area are subject to effective competition, or (2) any video programming offered on a per channel or per program basis. Bulk discounts to multiple dwelling units shall not be subject to this subsection, except that a cable operator of a cable system that is not subject to effective competition may not charge predatory prices to a multiple dwelling unit. Upon a prima facie showing by a complainant that there are reasonable grounds to believe that the discounted price is predatory, the cable system shall have the burden of showing that its discounted price is not predatory.

(e)Discrimination; services for the hearing impaired

Nothing in this subchapter shall be construed as prohibiting any Federal agency, State, or a franchising authority from—

(1)prohibiting discrimination among subscribers and potential subscribers to cable service, except that no Federal agency, State, or franchising authority may prohibit a cable operator from offering reasonable discounts to senior citizens or other economically disadvantaged group discounts; or

(2)requiring and regulating the installation or rental of equipment which facilitates the reception of cable service by hearing impaired individuals.

(f)Negative option billing prohibited

A cable operator shall not charge a subscriber for any service or equipment that the subscriber has not affirmatively requested by name. For purposes of this subsection, a subscriber’s failure to refuse a cable operator’s proposal to provide such service or equipment shall not be deemed to be an affirmative request for such service or equipment.

(g)Collection of information

The Commission shall, by regulation, require cable operators to file with the Commission or a franchising authority, as appropriate, within one year after October 5, 1992, and annually thereafter, such financial information as may be needed for purposes of administering and enforcing this section.

(h)Prevention of evasions

Within 180 days after October 5, 1992, the Commission shall, by regulation, establish standards, guidelines, and procedures to prevent evasions, including evasions that result from retiering, of the requirements of this section and shall, thereafter, periodically review and revise such standards, guidelines, and procedures.

(i)Small system burdens

In developing and prescribing regulations pursuant to this section, the Commission shall design such regulations to reduce the administrative burdens and cost of compliance for cable systems that have 1,000 or fewer subscribers.

(j)Rate regulation agreements

During the term of an agreement made before July 1, 1990, by a franchising authority and a cable operator providing for the regulation of basic cable service rates, where there was not effective competition under Commission rules in effect on that date, nothing in this section (or the regulations thereunder) shall abridge the ability of such franchising authority to regulate rates in accordance with such an agreement.

(k)Reports on average prices

(1)In general

The Commission shall publish with its report under section 163 of this title statistical reports on the average rates for basic cable service and other cable programming, and for converter boxes, remote control units, and other equipment of cable systems that the Commission has found are subject to effective competition under subsection (a)(2) compared with cable systems that the Commission has found are not subject to such effective competition.

(2)Inclusion in report

(A)In general

The Commission shall include in its report under paragraph (1) the aggregate average total amount paid by cable systems in compensation under section 325 of this title.

(B)Form

The Commission shall publish information under this paragraph in a manner substantially similar to the way other comparable information is published in such report.

(l)Definitions

As used in this section

(1)

(2)The term “cable programming service” means any video programming provided over a cable system, regardless of service tier, including installation or rental of equipment used for the receipt of such video programming, other than (A) video programming carried on the basic service tier, and (B) video programming offered on a per channel or per program basis.

(m)Special rules for small companies

(1)In general

Subsections (a), (b), and (c) do not apply to a small cable operator with respect to—

(A)cable programming services, or

(B)a basic service tier that was the only service tier subject to regulation as of December 31, 1994,

in any franchise area in which that operator services 50,000 or fewer subscribers.

(2)“Small cable operator” defined

For purposes of this subsection, the term “small cable operator” means a cable operator that, directly or through an affiliate, serves in the aggregate fewer than 1 percent of all subscribers in the United States and is not affiliated with any entity or entities whose gross annual revenues in the aggregate exceed $250,000,000.

(n)Treatment of prior year losses

Notwithstanding any other provision of this section or of section 532 of this title, losses associated with a cable system (including losses associated with the grant or award of a franchise) that were incurred prior to September 4, 1992, with respect to a cable system that is owned and operated by the original franchisee of such system shall not be disallowed, in whole or in part, in the determination of whether the rates for any tier of service or any type of equipment that is subject to regulation under this section are lawful.

(o)Streamlined petition process for small cable operators

(1)In general

Not later than 180 days after December 4, 2014, the Commission shall complete a rulemaking to establish a streamlined process for filing of an effective competition petition pursuant to this section for small cable operators, particularly those who serve primarily rural areas.

(2)Construction

Nothing in this subsection shall be construed to have any effect on the duty of a small cable operator to prove the existence of effective competition under this section.

(3)Definition of small cable operator

In this subsection, the term “small cable operator” has the meaning given the term in subsection (m)(2).

Notes & Related Subsidiaries

Editorial Notes

Amendments

2018—Subsec. (k)(1). Pub. L. 115–141, § 402(e)(1), substituted “publish with its report under section 163 of this title” for “annually publish”. Subsec. (k)(2). Pub. L. 115–141, § 402(e)(2), struck out “annual” before “report” in heading. 2014—Subsec. (k). Pub. L. 113–200, § 110, amended subsec. (k) generally. Prior to amendment, text read as follows: “The Commission shall annually publish statistical reports on the average rates for basic cable service and other cable programming, and for converter boxes, remote control units, and other equipment, of— “(1) cable systems that the Commission has found are subject to effective competition under subsection (a)(2) of this section, compared with “(2) cable systems that the Commission has found are not subject to such effective competition.” Subsec. (o). Pub. L. 113–200, § 111, added subsec. (o). 1996—Subsec. (a)(7). Pub. L. 104–104, § 301(j), added par. (7). Subsec. (c)(1)(B). Pub. L. 104–104, § 301(b)(1)(A), substituted “franchising authority (in accordance with paragraph (3))” for “subscriber, franchising authority, or other relevant State or local government entity”. Subsec. (c)(1)(C). Pub. L. 104–104, § 301(b)(1)(B), substituted “the first complaint filed with the franchising authority under paragraph (3)” for “such complaint”. Subsec. (c)(3), (4). Pub. L. 104–104, § 301(b)(1)(C), added pars. (3) and (4) and struck out heading and text of former par. (3). Text read as follows: “Except during the 180-day period following the

Effective Date

of the

Regulations

prescribed by the Commission under paragraph (1), the procedures established under subparagraph (B) of such paragraph shall be available only with respect to complaints filed within a reasonable period of time following a change in rates that is initiated after that

Effective Date

, including a change in rates that results from a change in that system’s service tiers.” Subsec. (d). Pub. L. 104–104, § 301(b)(2), inserted at end “This subsection does not apply to (1) a cable operator with respect to the provision of cable service over its cable system in any geographic area in which the video programming services offered by the operator in that area are subject to effective competition, or (2) any video programming offered on a per channel or per program basis. Bulk discounts to multiple dwelling units shall not be subject to this subsection, except that a cable operator of a cable system that is not subject to effective competition may not charge predatory prices to a multiple dwelling unit. Upon a prima facie showing by a complainant that there are reasonable grounds to believe that the discounted price is predatory, the cable system shall have the burden of showing that its discounted price is not predatory.” Subsec. (l)(1)(D). Pub. L. 104–104, § 301(b)(3), added subpar. (D). Subsec. (m). Pub. L. 104–104, § 301(c), added subsec. (m). Subsec. (n). Pub. L. 104–104, § 301(k)(1), added subsec. (n). 1992—Pub. L. 102–385 amended section generally, substituting present provisions for former provisions which related in subsec. (a) to limitation on regulatory power of Federal agencies, States, or franchising authorities, in subsec. (b) to promulgation, scope, content, periodic review, and amendment of

Regulations

, in subsec. (c) to regulation by franchising authority during initial 2-year period, in subsec. (d) to automatic granting of rate increase requests upon agency inaction within 180-day period, in subsec. (e) to additional increases in rates and to reduction by amount of increase under franchise provisions, in subsec. (f) to nondiscrimination and facilitation of reception by hearing-impaired individuals, in subsec. (g) to continued effectiveness of limitation or the preemption of regulation under prior State law, and in subsec. (h) to reports and recommendations to Congress.

Statutory Notes and Related Subsidiaries

Effective Date

of 1996 Amendment Pub. L. 104–104, title III, § 301(k)(2), Feb. 8, 1996, 110 Stat. 118, provided that: “The amendment made by paragraph (1) [amending this section] shall take effect on the date of enactment of this Act [Feb. 8, 1996] and shall be applicable to any rate proposal filed on or after

September 4, 1993, upon which no final action has been taken by

December 1, 1995.”

Effective Date

of 1992 Amendment Pub. L. 102–385, § 3(b), Oct. 5, 1992, 106 Stat. 1471, provided that: “The amendment made by subsection (a) [amending this section] shall take effect 180 days after the date of enactment of this Act [Oct. 5, 1992], except that the authority of the Federal Communications Commission to prescribe

Regulations

is effective on such date of enactment.”

Effective Date

Section effective 60 days after Oct. 30, 1984, except where otherwise expressly provided, see section 9(a) of Pub. L. 98–549, set out as a note under section 521 of this title. Restoration, Retierment and Repricing of Service Previously Eliminated, Retiered, or Repriced Pub. L. 98–549, § 9(b), Oct. 30, 1984, 98 Stat. 2806, provided that: “Nothing in section 623 or 624 of the Communications Act of 1934 [section 543 and 544 of this title], as added by this Act, shall be construed to allow a franchising authority, or a State or any political subdivision of a State, to require a cable operator to restore, retier, or reprice any cable service which was lawfully eliminated, retiered, or repriced as of September 26, 1984.”

§543 Regulation of Rates

Summary

Title 47, §543

Notes & Related Subsidiaries

Editorial Notes

Amendments

Effective Date

Regulations

Effective Date

Regulations

Statutory Notes and Related Subsidiaries

Effective Date

Effective Date

Regulations

Effective Date

Citations & Metadata