Cable Industry’s 2024 Will Be a Chore

Jan 01, 2024

By Ted Hearn, Editor of Policyband

Washington, D.C., Jan. 1, 2024 – Predicting how things shake out politically for the cable industry in 2024 involves juggling too many possible outcomes. So that’s anyone’s guess. But what is predictable is this: Cable lobbyists will find 2024 to be quite a chore.

At the Federal Communications Commission, cable’s policy agenda will be extensive and complicated, especially with FCC Chair Jessica Rosenworcel wanting Net Neutrality to make a comeback.

On Capitol Hill, a battle over a major broadband subsidy program will arrive early in the year.

In the courts, cable is likely to launch at least four lawsuits against the Biden Administration. Some cases might even make it all the way to the Supreme Court, but it can take years for a final decision to arrive.

Here’s a rundown of what’s ahead for cable in 2024:

Affordable Connectivity Program (ACP): This broadband subsidy program – which takes $30 off monthly Internet bills for the eligible – is expected to run out of money by April. Though the White House has requested $6 billion to keep the ACP running, senior House and Senate Republicans oppose an extension without serious belt tightening. The ACLU is putting pressure on the FCC to start notifying the 20-million plus ACP enrollees that the program could be shutting down. Sen. John Fetterman (D-Pa.) said he wants to pass a bill that requires Big Tech to help fund the ACP. Starlink disclosed last month it plans to join the ACP program. The satellite Internet provider closed out 2023 with 1.3 million U.S. subscribers.

Net Neutrality: The FCC’s Democratic majority is expected to impose common carrier regulations on broadband ISPs in the first half of 2024. A lingering question is whether the FCC exempts small ISPs, as requested by WISPA. In the guaranteed court case, the FCC will encounter the Supreme Court’s new “major questions doctrine,” which is an attempt by the judiciary to stop the administrative state from adopting rules with considerable economic and political consequences that lack clear authorization from Congress. With the major questions doctrine in play, dismissing out of hand a judicial stay of the FCC’s Net Neutrality rules would not be advisable.

706 Report: Rosenworcel supports defining broadband at 100/20 Mbps, effectively meaning that end users that can’t get those speeds are considered unserved or underserved. Google Fiber is pushing for a symmetrical 100/100 Mbps standard, over the objections of cable broadband ISPs. Late last month, the Commerce Department’s National Telecommunications and Information Administration (NTIA) filed a letter with the FCC endorsing 100/20 Mbps.

BEAD Program: Broadband ISP incumbents are concerned that some of the $42.45 billion in the Broadband Equity, Access, and Deployment (BEAD) Program will be used to overbuild their networks, though they have been promised legal protection from such activity. Wasteful spending by BEAD administrators – in addition to excessive reliance on expensive fiber projects – could bust the budget. ISPs are not paranoid about overbuilding. In 2022, Phoenix-based Cable One had to fend off a would-be government-funded overbuilder in Louisiana. Shentel, in Edinburg, Va., told the FCC last month that American Rescue Plan Act funding was used to overbuild its existing cable plant in at least two markets. Consolidated Communications said a reason it wants to sell to private equity is fear of BEAD overbuilders.

ETFs and BCFs: The FCC’s plan is to ban cable and satellite TV early termination fees and billing cycle fees, though perhaps the final rule will be a slightly modified version of Rosenworcel’s initial proposal. In the court battle sure to come, cable will argue that ETF and BCF bans are impermissible forms of rate regulation. Dish and DirecTV – which have never had the regulatory book thrown at them like cable has - should have a much easier time in getting the FCC’s regs tossed out in court than cable.

Retrans Blackout Reporting: The FCC wants to require cable and satellite TV operators to report TV station retransmission consent blackouts that last more than 24 hours. The FCC plans to host an online portal to receive the blackout reports, though the agency is promising to keep confidential “sensitive information regarding subscribers.” Because the FCC has no plans to place any reporting burdens on TV stations, it’s unlikely the agency’s less-is-more approach will survive serious pushback from cable and satellite lobbyists. At some point, Rosenworcel plans to pair blackout notifications with another rule requiring cable and satellite TV operators to issue rebates to compensate blacked out customers. DirecTV currently is offering rebates, $25 gift cards, and free antennas to customers currently being blacked out by TV station owner Tegna.

Digital Discrimination: The FCC’s Digital Discrimination rules adopted in November included a disparate impact standard that could lead to fines and other penalties on ISPs for unintentional discrimination in the deployment of broadband networks and the provision of Internet services. In the 2021 Infrastructure Investment and Jobs Act (IIJA), Congress ordered the FCC in section 60506 to prevent “digital discrimination of access based on income level, race, ethnicity, color, religion, or national origin; and (2) identify … necessary steps for the [FCC] to take to eliminate discrimination ...” Language that broad usually means the FCC wins in court. But on Jan. 17, the Supreme Court will hear oral arguments in a case called Loper Bright Enterprises v. Raimondo, which is expected to result in a new judicial doctrine that will allow courts to show less deference to the FCC in interpreting the scope of a law like section 60506 of the IIJA. That will certainly come in handy when cable undoubtedly takes the FCC to court over its digital discrimination rules

Classification of Video Streamers: The National Association of Broadcasters is urging the FCC to classify Google’s YouTube TV as a traditional cable TV operator, which effectively means higher retransmission consent fees for local TV stations. Rosenworcel does not believe the law supports NAB’s position, adding that Congress needs to make the call. Because NAB has as many supporters in the Senate as it does opponents in the House on this question, Capitol Hill is deadlocked. NAB’s CEO Curtis LeGeyt met in November with new FCC Democratic Commissioner Anna Gomez to pitch her on changing streamers’ legal status. Cable is hardly a bystander because it’s not exactly clearly how the FCC, if it ended up backing NAB, would resolve fundamental questions about regulatory parity, such as: Would Google – like cable TV companies – need to obtain franchises from thousands of local governments and pay franchise fees equal to 5% of revenue? 

All-In Pricing: Rosenworcel has proposed rules that would require cable and satellite TV providers to provide the “all-in” price for “video programming service in their promotional materials and on subscribers’ bills.” The FCC believes its rules would help consumers make informed choices and comparison shop. However, cable consumers “receive clear and transparent pricing disclosures regarding [pay-TV] services at the point of sale and in bills,” as required by the Television Viewer Protection Act of 2019 (TVPA), according to NCTA - The Internet & Television Association. Because the FCC’s all-in pricing rules would apply to cable’s advertising and promotional materials aimed at non-subscribers – which NCTA says is not authorized by the TVPA or prior cable law – the FCC is likely overstepping its bounds and inviting litigation.