The Federal Communications Commission is facing pressure to make it easier for cable television companies and competitive telephone providers to merge.
Earlier this summer, the National Telecommunications & Cable Association asked the FCC to find that cross-ownership prohibitions contained in the Telecommunications Act of 1996 do not apply to cable operators and competitive local exchange carriers or so-called CLECs.
NCTA, which represents the U.S. cable industry and is led by former FCC Chairman Michael Powell, also filed a separate petition that asked the agency to “forbear from enforcing Section 652 of the Act to mergers, acquisitions, and other transactions between cable operators and" CLECs.
In comments filed Monday with the FCC, several organizations expressed their support for the petitions, including the American Cable Association, Citizens Against Government Waste, COMPTEL and the Taxpayers Protection Alliance.
Today was the deadline for filing comments on NCTA’s petitions in Proceeding Number 11-118, and reply comments are due on Sept. 21, according to an FCC spokesperson, who gave no indication as to when the agency would rule.
“The pro-competitive features of cable-CLEC combinations are as important as they are obvious," American Cable Association President and CEO Matthew Polka said in a statement. “Giving a CLEC access to a cable network’s facilities can reduce the CLEC’s operational costs, while cable companies can benefit from access to the CLEC’s back-office infrastructure and established relationships with business customers."
Section 652
Section 652 of the 1996 Telecom Act imposes cross-ownership restrictions on cable operators and so-called local exchange carriers (LECs) that provide telephone service. The federal law limits a cable company’s ownership interest in a LEC within the cable company’s franchise area to 10 percent, and the same restriction applies to a LEC’s acquisition of a cable operator within the LEC's telephone service area.
Section 652(d)(6) gave the FCC authority to permit such mergers if it made certain findings, including that “either the cable or telephone company would be subjected to undue economic distress by enforcement of the provisions," according to comments filed Monday by the National Association of Telecommunications Officers and Advisors. However, such a waiver also requires approval of the local franchising authorities.
