FEDERAL COMMUNICATIONS COMMISSION FACT SHEET October 1995 CABLE TELEVISION FACT SHEET THE CONSUMER'S R OLE IN 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 should 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: The FCC regulates the rates 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. The FCC also regulates rates for equipment used solely to receive cable programming service, as well as installation and service charges related solely to cable programming service. However, since most equipment used to receive cable programming service is also used to receive basic service, equipment complaints should generally be directed to your local franchising authority. 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: The rates for the basic service tier are regulated by your local franchising authority. 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 an operator facing competition would charge. Cable programming services--that is, all video programming provided over a cable system not including basic service or per-channel or per-program service--is subject to regulation directly by the FCC, and not by your local authority. The Commission will consider whether rates are reasonable for such video programming services when a complaint is filed by a subscriber to that cable system. 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. In addition to the benchmark as the basis of rate regulation, the FCC has adopted a price cap for annual price increases. A cable system that has no effective competition cannot increase its rates beyond inflation, which is measured by an annually-calculated price index (the GNP- PI). A cable system may make increases because of increases in certain costs outside of its control and when it adds programming. If a cable company believes that its rates must be permitted to exceed the benchmark, or its rate increase must be allowed to exceed the price cap, it can elect to justify higher rates by making a cost of service showing. This a more complicated method for determining the reasonableness of a cable company's rates 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 and price cap maximums. 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 to above within 120 days of certification. Should your local franchising authority's certification be denied or revoked, the Commission will assume jurisdiction to regulate rates for basic cable service and associated equipment of a given system. The Commission will not intervene to regulate basic cable service rates should your local franchising authority choose not to seek certification from the Commission nor request the Commission to assume jurisdiction. Q: How do I file a complaint with the FCC? A: If you are a cable subscriber wishing to file a complaint with the FCC about rates for cable programming service, related equipment, or installation, you should fill out FCC Form 329 and submit it to the FCC. Franchising authorities and other relevant state or local governments may also file FCC Form 329 to file a complaint with the FCC about rates for cable programming service, related equipment, or installation. Q: How does the complaint process work? A: Your complaint begins a legal process that requires your cable company to demonstrate that its rates are reasonable under the law. The FCC requires your cable company to respond in writing to your complaint within thirty days of the date you file your complaint, unless your cable company is notified by the FCC that your complaint cannot be processed. In its response, your cable company must show that its rates are reasonable under the law. The cable company must provide you with a copy of its response. The FCC will examine the information submitted by the cable company and determine whether its rates for cable programming service are too high. If so, the FCC may order a refund and/or a rate reduction for the cable programming service. You and the franchising authority will receive a copy of the FCC's final ruling on the reasonableness of the cable programming service rate charged by your cable company. Your complaint will be maintained by the FCC under the cable company's community unit identifier, which is a number assigned to each cable system by the FCC for administrative purposes. This number should appear on your cable bill. Your complaint will not be filed under your name. If you have any questions regarding the status of your complaint, you may call (202)416-0919. Please be prepared to tell us the name of the cable system and the name of the community where the cable system is located. 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. 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, P.O. Box 18698, Washington, D.C. 20036. The Commission's Consumer Assistance Branch also serves as a focal point for information dissemination and outreach to public interest and consumer organizations. It is located in Room 254, 1919 M Street, NW, Washington, D.C. 20554; telephone (202) 418-0190. Commission offices are normally open from 8:00 a.m. to 5:30 p.m., Monday through Friday, excluding federal legal holidays.