Joint Application for Review by the FCC
Filed by New Jersey Division of the Ratepayer Advocate and
New Jersey Board of Public Utilities

Senate President Richard Codey, BPU President Jeanne Fox, Mayor Angelo Corradino of Manville, and friends, thank you for coming today.

For the first time, the Board of Public Utilities and the Ratepayer Advocate have taken the unprecedented action of joining together to file a joint application before the Federal Communications Commission.

Our two separate agencies are joining together to protect New Jersey consumers. We are asking the Commissioners of the FCC to overturn a decision by its Media Bureau that will have a serious impact on New Jersey consumers if allowed to stand.

In this decision, which was issued on April 15, the FCC’s Media Bureau revoked the BPU’s certification to regulate basic service tier rates for approximately 200,000 subscribers of Cablevision in 49 communities, primarily located in northern New Jersey. The Basic Service Tier (BST) rates are the rates that Cablevision charges its subscribers for just basic cable TV service.

In its decision, the FCC’s Mass Media Bureau held that Cablevision satisfied the “competitive provider test” and that effective competition now exists in these communities. To translate this into simple terms, this ruling means that Cablevision is no longer subject to the BPU’s review of BST rates, and that Cablevision can now raise rates for their subscribers in the impacted towns.

The BPU and the Ratepayer Advocate state in the joint application filed with the FCC that this decision is wrong. We maintain that the Mass Media Bureau got it wrong. We are challenging the decision on a number of grounds, which are outlined in the joint filing.

But – and this is our basic point - the Mass Media Bureau based its finding on mismatched data. The Bureau’s decision is based on a comparison of cable penetration data from 2002 and 2003 against census data from 2000. This should not satisfy the FCC’s “competitive provider test.”

My staff, using Certificates of Occupancy and tax records, compiled updated household census data in eight of the impacted communities. Our research showed that, based on the increased number of households, the Direct Broadcast Satellite penetration fell below 15 percent in all eight of the communities. They are: Aberdeen, Bound Brook, Sayreville, Old Tappan, Kinnelon, Interlaken, Manasquan, and Washington.

Our research emphatically supports our contention that only by comparing properly matched data can the FCC get accurate statistics on competition.

The BPU and the Ratepayer Advocate have joined together – with the full support of Governor McGreevey and the New Jersey League of Municipalities and AARP -- because of the significance of this decision. This action goes beyond the immediate impact on consumers in these 49 communities.

If decisions on effective competition are made using mismatched data, then the ability of the BPU to regulate BST rates and the Ratepayer Advocate’s ability to represent the interests of consumers will be improperly eliminated. If this decision is permitted to stand, then the impact will be felt in other New Jersey communities.

We are pro-consumer and pro-competition because we believe consumers benefit with better service and better prices where a healthy competitive environment exists. Until competition occurs, then BST rates must remain regulated by the BPU in order to protect the consumer.

My office will work diligently to ensure that basic cable rates remain regulated in non-competitive areas. Many residents throughout the state, particularly senior citizens and low-income customers, need basic cable as an essential service. We will do all we can to preserve and protect consumers from the premature deregulation of BST rates.

I would like to take a moment to thank the very hard working member of my staff who have been on top of this issue from the start and the BPU’s staff.

Let me briefly outline the timeline on this matter. The Ratepayer Advocate and the BPU met Monday’s deadline for filing. We’re holding our news conference today to give you an opportunity to ask questions. Cablevision has 15 days – by June 1 – to respond. We then have 10 days to reply. The record in this matter will be complete and the FCC review process will commence.

We are hopeful that the full FCC agrees with our position and vacates and reverses the Media Bureau’s decision in this matter. The four specific remedies we are seeking are outlined on the last page of our filing.