Rate Counsel Opposes Deregulation of Cable Rates in 109 Towns

Deregulation request by Comcast and Time Warner noted as a growing trend

Newark, N.J.— New Jersey Rate Counsel Director Stefanie A. Brand today announced the first of several filings opposing recent requests by cable companies to deregulate cable rates in 109 New Jersey towns.

Responding to petitions filed by Time Warner Cable and Comcast Cable Communications, Rate Counsel asked the Federal Communications Commission (FCC) to deny the companies’ request to declare that “effective competition” obviates the need for state regulation.  “They have not demonstrated that there is sufficient competition to protect customers from unfair rate increases,” Brand said.  “Based on what they have before them, there is no justification for the FCC to lift state regulatory controls and abandon consumers to prices dictated by the cable companies.”

Under the Telecommunications Act, subscriber rates of cable television systems are exempt from rate regulation if it can be proved that there is sufficient competition from other providers to ensure a competitive market. If a cable company shows that a sufficient percentage of the local market is served by a competitor, the FCC can determine that effective competition exists and deregulate rates in the local area. In the Time Warner application, however, the company relied on outdated and inconsistent data to argue that competition from satellite providers was sufficient to ensure that the market would set a competitive price.  Rate Counsel also challenged whether Comcast’s reliance on competition from Verizon FIOS service was enough to justify the claim that its rates should be deregulated.   Rate Counsel argued that FIOS does not yet offer certain public, educational and government channels and that Comcast failed to prove that FIOS does in fact compete in each affected municipality.

Brand noted that more companies are filing more frequent requests for exemption from state regulation. This year, nine petitions covering 77 New Jersey municipalities have been filed by Cablevision, one, covering eight municipalities was filed by Time Warner, and five petitions covering 24 municipalities were filed by Comcast.  Previously, Cablevision filed several deregulation petitions covering franchises that served consumers in 49 New Jersey municipalities. Those petitions were granted by the FCC and Rate Counsel has appealed the Commission’s orders.

“The FCC’s own reports show that basic cable rates have increased dramatically over the last 10 years,” said Brand.  “New Jersey’s rates have followed this trend.  We can’t sit back while more and more petitions are filed to end any controls on cable rates. The FCC needs to look at these petitions more carefully to make sure consumers are protected.”

On Nov. 5, 2007, Rate Counsel filed comments opposing the Time Warner petition which would deregulate rates in Englewood, Fairview, Guttenberg, Little Ferry, Moonachie, Ridgefield Park, Ridgefield and Teterboro. On November 9, 2007, Rate Counsel will oppose Comcast’s petition which would deregulate rates in Audubon Borough, Barrington, Cherry Hill, Cranford, East Rutherford, Eatontown,  Fair Haven, Freehold, Garwood, Haddon Heights, Haddonfield, Holmdel, Kenilworth, Lawnside, Little Silver, Middletown, Monroe, Oceanport, Red Bank, Rumson, Sea Bright, Shrewsbury Borough, Tinton Falls, and Wallington.

Rate Counsel will also be filing comments on petitions recently filed by Cablevision that seek to deregulate rates in: Alpine, Clifton, North Haledon, Passaic, Riverdale, Totowa, Allendale, Cedar Grove, Elmwood Park, Glen Rock, Hackensack, Hasbrouck Heights, Ho-Ho-Kus, Little Falls, Lodi, Maywood, Midland Park, Nutley, Oakland, Park Ridge, Ramsey, Ridgewood, River Edge, Teaneck, Waldwick ,Washington, Wayne, Westwood, Wyckoff, Allentown, Dover, Stanhope, Victory Gardens, Boonton, Denville, East Hanover, Florham Park, Hanover, Jefferson, Mine Hill, Montville, Morris, Morris Plains, Morristown, Mount Olive, Mountain Lakes, Parsippany Troy Hills, Randolph, Rockaway Borough, Rockaway Township, Roxbury, Wharton, Newark, North Bergen, West New York, Hoboken, Bayonne, Hillsdale, Paramus, Bergenfield, Demarest Dumont, Emerson, Fair Lawn, Harrington Park, Howarth, New Milford, Northvale, Norwood, Oradell, Farmingdale, Asbury Park, Belmar, Bradley Beach, Lake Como, Neptune and Spring Lake Heights.

For further details about Rate Counsel’s filed comments, go to http://www.state.nj.us/publicadvocate/utility

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The Division of Rate Counsel is a division within the Department of the Public Advocate and represents the interests of consumers of electric, natural gas, water/sewer and telecommunications and cable TV service. Additional information on this and other utility matters can be found at the Division’s website at  http://www.state.nj.us/rpa/. The Department of the Public Advocate website is http://www.njpublicadvocate.gov.