West Milford, Elizabeth and Montvale Area Cable Subscribers Could Pay More

Public Advocate Opposes FCC Deregulation Order

Newark, N.J.— Public Advocate Ronald K. Chen today announced the filing of an application for review with the Federal Communications Commission (FCC) that seeks to maintain state regulation of basic cable rates for West Milford, Elizabeth and Montvale area Cablevision subscribers.

“If the FCC’s order is not reversed, Cablevision is free to raise rates for basic cable service customers in this area without any oversight by the Board of Public Utilities or review from the Department of the Public Advocate,” said Chen. “Cable rates are already too high and there is not effective competition to keep rates low.”  

The FCC’s Media Bureau, which under the FCC oversees the cable and broadcasting industries, issued an order that eliminates the ability of the New Jersey Board of Public Utilities (BPU) to regulate basic service rates of Cablevision Systems Corp. in three New Jersey municipalities. The order was made on June 26, 2007, but it is retroactive to January 31, 2005, the date of Cablevision’s filing. 

The FCC allows an exemption from rate review for cable operators if they can prove that competition exists for 15 percent of households.

The Public Advocate’s Division of Rate Counsel’s comments challenge the FCC order based upon Cablevision’s improper use of outdated 2000 household census data. The comments assert that Cablevision’s use of such data is mismatched for the time period when the petition was filed and more recent data should have been used to show household changes. Rate Counsel’s comments also question why the Media Bureau shifted the burden of proof to Rate Counsel instead of on the cable operator as required by FCC rules.

 Rate Counsel’s comments state:

“The Bureau should not abdicate its obligation to protect the public interest and should faithfully apply the Communications Act and the Commission’s rules implementing the Act…”The loss of the authority to regulate rates has serious consequences for ratepayers.”

The comments, which were filed July 26, 2007, also document that Cablevision’s claims that satellite providers serve more than 15 percent of the households in the respective communities is contrary to evidence produced by the Public Advocate in the proceeding. Rate Counsel’s comments state that it relies on more time-sensitive data, including updated Census data and information from the New Jersey Department of Community Affairs about each municipality’s housing and development conditions that demonstrates a higher number of households than what was used by Cablevision.

Chen said that Rate Counsel has asked that the full commission review this and other decisions of the Medial Bureau related to Cablevision’s claims of effective competition in over 54 municipalities within New Jersey. 

“Rate Counsel will continue to vigilantly use all avenues possible to prevent consumers from being unfairly exposed to higher rates,” said Chen.

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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/publicadvocate/utility. The Department of the Public Advocate website is http://www.state.nj.us/publicadvocate.