Press Release

Ratepayer Advocate Challenges Cablevision Systems Corp. Claim of Effective Competition in Three New Jersey Municipalities

FCC Asked to Deny Exemption from Regulation

Newark, N.J. --- The New Jersey Ratepayer Advocate (RPA) is challenging the claim of Cablevision Systems Corp. that it should be exempt from rate regulation by the New Jersey Board of Public Utilities (BPU) because it faces effective competition in the municipalities of Elizabeth, West Milford and Montvale.

In its comments filed with the Federal Communications Commission (FCC), the RPA noted that the data used by the cable TV company to support its claim is flawed and that the FCC should permit discovery to reveal the true nature of competition in these municipalities.

“The outdated data coupled with the mismatch of household data based upon the 2000 census and more recent satellite penetration data is insufficient for Cablevision to make a claim of effective competition,” said New Jersey Ratepayer Advocate Seema M. Singh. “New Jersey towns have changed significantly over the last few years and the company’s numbers do not reflect that.”

The RPA opposes Cablevision’s petition before the FCC that its cable systems serving the three municipalities have effective competition from direct broadcast satellite providers, DirecTV, Inc. and EchoStar Communications Corp. Cablevision claims that those companies serve more than 15 percent of the households in the respective communities, which satisfies the federal criteria for a declaration of effective competition. If the petition is granted by the FCC, the BPU would no longer be able to regulate any rates for those cable franchises.

The Ratepayer Advocate worked cooperatively with the three municipalities to obtain independent evidence to challenge Cablevision’s petition. The RPA found
that the number of households in the three municipalities had increased and those increases did not meet the 15 percent test for competition---therefore these franchises should remain regulated by the BPU. The RPA noted that the FCC rules require that each separately billed or billable customer should be counted as an additional household. This can increase the number of households as reported in the 2000 census, which affects whether effective competition actually exists, said the RPA.

According to the RPA comments, in Elizabeth, both the increase in the number of households and the increased number of satellite dishes per household in representative census tracts calls into question the numbers Cablevision presented. The RPA also noted that Cablevision did not use available data to more accurately support what the number of households are today.

The Ratepayer Advocate requested that the FCC direct Cablevision to re-file a new petition with household data for each franchise based upon updated 2000 census data and satellite penetration data that correlates with that updated household count. If the FCC declines to dismiss the petition and direct re-filing, the RPA has requested that the FCC grant the RPA’s motion for discovery and suspend the period for filing comments pending acquisition of the necessary information.

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For more information, contact the Division of the Ratepayer Advocate at 973-648-2690.

The Division of the Ratepayer Advocate is an independent state agency that represents the interests of utility consumers and serves as an active participant in every case whenever New Jersey utilities seek changes in their rates or services. The Ratepayer Advocate also gives consumers a voice in setting long-range energy, water, and telecommunications policy that will affect the delivery of utility services well into the future.

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