Court Upholds FCC Rule On Cable TV Franchises

CINCINNATI (CN) - The 6th Circuit upheld a Federal Communications Commission order expanding the ability of cable television franchises such as Qwest and AT&T to compete in local markets.

The agency issued an order in March 2007 barring local franchising authorities from not only refusing to award a competitive franchise, but also taking steps that create an "unreasonable barrier" to the competition. Local franchising authorities challenged the FCC's authority to set rules based on its own interpretation of the Communications Act of 1934, which had only stipulated that franchising authorities cannot "unreasonably refuse to award" competitive cable franchises.

The FCC maintained that it had the authority to make rules based on the law, and only issued the order after weighing input from incumbent cable operators, industry newcomers, local franchising authorities and consumer groups.

Ruling on several consolidated cases, Judge Cole Jr. found that the FCC had "acted well within its statutorily delineated authority in enacting the order." Additionally, the court said "ample record evidence" supports the FCC's finding that the franchising process had been suppressing competition by dragging out the franchise-granting procedure and by imposing burdensome requirements on competitors.

The state of Hawaii, the National Cable & Telecommunications Association, and the cities of New York, Milwaukee, White Plains and Wilmington intervened on behalf of the plaintiffs. Intervenors for the government included the Ad Hoc Telecom Manufacturer Coalition, Qwest Communications International, USTelecom, Verizon and AT&T.

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