Cablers may be regulated like utilities

The Federal Communications Commission Thursday proposed allowing cable systems that opt to have their prices regulated like a utility to receive an annual rate of return on capital of 10%-14%.

In proposing a utility-like, “cost-of-service” pricing scheme, the FCC said it would prefer that cablers opt instead for a “benchmark” pricing alternative the agency unveiled in April.

Choosing the cost-of-service regulation will require a huge contingent of accountants and lawyers to argue the case before the FCC, the agency warned.

Those cablers who choose cost-of-service regulation will not be permitted to pass some costs along to consumers as part of their rate base, the FCC said. For example, companies that assumed heavy debt when overpaying for a cable system may not be permitted to pass the cost of debt service on to customers, the FCC said.

A cabler would be permitted to include costs in base rate calculations.

Want to read more articles like this one? SUBSCRIBE TO VARIETY TODAY.
Post A Comment 0

Leave a Reply

No Comments

Comments are moderated. They may be edited for clarity and reprinting in whole or in part in Variety publications.

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

More TV News from Variety

Loading