FEDERAL C OMMUNICATIONS COMMISSION 
W ASH I NGTON 
OFFICE OF 
THE CHAIR MAN 
The Honorable Barbara A. Mikulski 
United States Senate 
503 Hart Senate Office Building 
Washington, D.C. 20510 
June 5, 2015 
Thank you for your letter about the scope of the Commission's implementation of 
Section 111 of the STELA Reauthorization Act of 2014 (STELAR). 
As you know, Congress established the test for Effective Competition currently 
implemented by the Commission in the Cable Television Consumer Protection and Competition 
Act of 1992 (" 1992 Cable Act"). The statutory test for the type of Effective Competition at issue 
in the proposed Order is satisfied if the franchise area is "(i) served by at least two unaffiliated 
[MVPDs] each of which offers comparable video programming to at least 50 percent of the 
households in the franchise area; and (ii) the number of households subscribing to programming 
services offered by [MVP Os] other than the largest [MVPD] exceeds 15 percent of the 
households in the franchise area."1 When the Commission adopted the presumption of no 
Effective Competition in 1993, incumbent cable operators had approximately a 95 percent 
market share of MVPD subscribers. 
In the more than twenty years since Congress's 1992 instructions, competition in the 
video marketplace has increased dramatically. The nationwide presence of DIRECTV (which 
provides local broadcast channels to 197 markets representing over 99 percent of U.S. homes) 
and DISH Network (which provides local broadcast channels to all 210 markets), alongside the 
significant number of direct broadcast satellite (DBS) subscribers (34.2 million or 33.9 percent 
ofMVPD subscribers),2 results in approval of Effective Competition petitions in almost every 
instance. The FCC has granted Effective Competition petitions in over 10,000 communities thus 
far and has found that Effective Competition exists in more than 99.5 percent of the communities 
evaluated since 2013. 
In adopting a rebuttable presumption of Competing Provider Effective Competition, the 
Commission provided the administrative relief for small cable operators required by Section 111 
of STELAR. It also preserved the ability of local franchising authorities (LF As) to rate regulate 
if they are able to provide data refuting the presumption. Less than one-fifth of the communities 
currently eligible to rate regulate have taken the administrative steps necessary to do so, but 
LF As that demonstrate a lack of Effective Competition will continue to be able to provide 
regulatory safeguards. The Office of Cable and Broadband Services in Montgomery County, 
1 47 U.S.C. § 543(1)( 1 ). This type of Effective Competition is known as Competing Provider Effective Competition. 
The other three types of Effective Compet ition defined in the statute are Low Penetration Effective Competition, 
Municipal Provider Effective Competition, and Local Exchange Carrier (LEC) Effective Competition. Only a 
rresumption of Competing Provider Effective Competition is at issue in this proceeding. 
Annual Assessment of the Status of Competition in the Market for the Delivery of Video Programming, Sixteenth 
Report, 30 FCC Red 3253, 3256, 2, and 3300-01, 1 11 2- 113 (2015). 
Page 2- The Honorable Barbara A. Mikulski 
Maryland, is one of the most active and engaged LFAs nationwide, and I expect that its valuable 
contribution will continue. Furthermore, other franchising authority abilities, including the 
collection of franchise fees, negotiation or oversight of PEG channels and I-Nets, or creation and 
enforcement of customer service requirements, will not be affected. 
Several commenters have suggested that this Commission action will result in the 
elimination of the basic service tier of programming, resulting in higher prices for price-sensitive 
cable customers.3 For the last several years, however, we have been able to watch real-world 
examples of what happens when cable rate regulation is removed. In the thousands of cable 
systems subject to Effective Competition, there has been no evidence in this proceeding to 
suggest that our previous findings of Effective Competition in thousands of communities led to 
any changes in the tier placement of local broadcast stations. Significantly, our most recent 
report on cable industry prices concludes that the average rate for basic service is lower in 
communities with a finding of Effective Competition than in those without such a finding. This 
is not surprising, since competitive choice is the most efficient market regulator. 
I share your concern about access to affordable local programming options. The item 
recently adopted by the Commission does nothing to undermine this goal. Instead, it provides 
the specific relief requested by Congress and acknowledges the response in the video 
marketplace to the aims of the 1992 Act. 
I appreciate your interest in this matter. Please let me know if I can be of any further 
assistance. 
3 See, e.g., Letter from Erin L. Dozier, Senior Vice President and Deputy General Counsel, Legal and Regulatory 
Affairs, NAB, to Marlene H. Dortch, Secretary, FCC (May 15, 2015). See also Letter from Public Knowledge el al. 
to The Honorable Tom Wheeler el al. (May 26, 2015).