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Cablevision Deregulated in N.J., N.Y Towns

4/16/2004 7:46 AM Eastern

The Federal Communications Commission has totally deregulated the rates of Cablevision Systems Corp. in nearly 60 comminutes in New Jersey and New York.

The decision by the FCC's Media Bureau Thursday removed the authority of local governments to slap price controls on the basic tier, which typically includes local TV stations, public-access channels and any cable networks operators elect to place there.

Effective March 31, 1999, the FCC lost authority to cap the rates of the expanded-basic tier -- the cable home of Cable News Network, C-SPAN, MTV: Music Television and the like.

The FCC agreed with Cablevision that based on factors established by federal law, the cable company was no longer subject to price controls in 49 New Jersey and nine New York communities.

Among the communities named were Raritan, Colts Neck and FranklinLakes in New Jersey and Lake Success, PlandomeHeights and North Hills in New York.

Cable operators are subject to local price controls until they can demonstrate the presence of effective competition, which generally means that all other pay TV providers combined serve more than 15% of households in a franchise area.

New Jersey regulators fought Cablevision, but FCC staff said the state's arguments were "without merit." New Jersey may appeal the ruling to the five commissioners and then in court.

Pursuant to the decision, Cablevision's franchising authorities are also barred from setting set-top-box rates and from requiring the company to establish a uniform rate structure.

Cablevision is also no longer covered by the so-called tier-buy-through rule, which bars regulated cable companies from forcing basic-only subscribers to buy additional tiers if they want access to premium channels and pay-per-view events.

September