The FCC gave Time Warner Cable (NYSE: TWC) the green light to hike basic-cable fees in several towns in Ohio and California, ruling Wednesday that it faces "effective competition" from DirecTV (Nasdaq: DTV) and Dish Network (Nasdaq: DISH).
Time Warner Cable had petitioned the FCC to determine that it faces enough pay TV competition in the towns to justify deregulating rate controls on its basic cable programming packages, which include local ABC, CBS, Fox and NBC affiliates. Time Warner and other pay TV providers have seen costs for basic-cable programming increase as local TV stations demand higher retransmission-consent fees.
The FCC granted the petition do deregulate Time Warner Cable's basic-cable tier in Bradbury, Calif., where the commission said DirecTV and Dish Network have penetrated 48.58 percent of pay TV homes combined.
The FCC also granted petitions from Time Warner Cable to deregulate basic-cable tiers in several Ohio towns, including Bellefontaine, Howard, McArthur, North Bloomfield, Stokes, Washington and the villages of Huntsville, Lakeview, Russells Point and Zanesville. FCC rules require that cable operators demonstrate that pay TV rivals have penetrated at least 15 percent of households before it determines that a provider faces effective competition, and is therefore no longer subject to local rate regulations.
Ohio towns with the highest satellite TV penetration were Howard (43.37 percent) and North Bloomfield (46.02 percent), and the village of Zanesfield also had a high penetration rate (25 percent), according to the FCC.
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