Interim FCC chairman James Quello said Tuesday his agency may postpone implementation of new cable TV rate regulation rules by week’s end, unless Congress doles out money needed to enforce the regs.
Quello, speaking at a National Cable Television Assn. convention luncheon, said FCC staffers are studying whether the agency has authority to delay implementing the rules, which are set to take effect June 21.
If the commission does have such power, and if no coin comes from Congress this week, the FCC will likely act Friday to block the rules until Oct. 1, according to Quello.
The FCC last week asked Congress for an immediate $ 12 million for this year and $ 16 million for next year to enforce the cable bill. Quello said his staff has been in contact with Sen. Ernest Hollings (D-S.C.), chairman of the Senate appropriations subcommittee, and that a decision is likely within a couple of days.
Quello also said he’d like to consider exempting independent cable systems with fewer than 1,000 subscribers from all provisions in the 1992 Cable Act.
Small operators “got lost in the shuffle” and deserve relief from the rereg mandates, said Quello.
However he said he’s not sure Congress would approve the small operator exemption. “I think I’ve got a fifty-fifty chance selling it” on Capitol Hill, he said.
Quello’s remarks will be sweet music to small cable operators, who have hammered FCC and Congressional staff attending the NCTA confab with complaints that they may go bankrupt complying with the new cable law.
Quello cautioned cablers “not to be too optimistic” over a possible deferral of the rate rules, since it’s only a matter of time before the bill will take full force.
He also warned the industry not to expect major revisions during the FCC reconsideration process.
Prior to Quello’s speech, a panel of FCC staffers defended the rules before a skeptical cable crowd. Under the regulations, cable operators have the option of accepting a “benchmark” pricing scheme or a cost-of-service approach that is traditional in utility company regulation.
Though there have been reports that many cable operators will opt for the cost-of-service regulation, FCC exec Robert Pepper warned that “people have to think long and hard before taking that route.”
“I don’t think you (the cable industry) have thought through the implications of utility-like pricing,” said Pepper, head of the FCC’s office of plans and policy.
Cost-of-service pricing may be a “non-starter” for small cable operators, warned one participant, because of the cost involved in hiring expensive lawyers and accountants.
John Hollar, an aide to FCC member Ervin Duggan, disputed suggestions that the new FCC rules were designed to hurt cable networks by encouraging a shift to a la carte programming.
“We were very sensitive” to the possibility that new rules would “result in a slow death or even a quick death” of cable networks, said Holler.
Pepper agreed, saying the FCC specifically sought to help programmers by allowing cable systems to pass through the cost of new program services to consumers.