w. ~. 1$ouse of l\epresentattbes
8a~bington, 1.D.(!C.20515
May 13,2015
The Honorable Tom Wheeler, Chairman
Federal Communications Commission
445 Twelfth Street, S.W.
Washington, D.C. 20554
Dear Chairman Wheeler,
As champions for reforming the video marketplace, we're writing to express our support for the
FCC's proposal to update the "effective competition" provision ofthe 1992 Cable Television
Consumer Protection and Competition Act.
According to a recent estimate by SNL Kagan, retransmission consent fees are expected to
increase from $4.9 billion to $9.3 billion by the end of the decade. IRecognizing the increased
fees and the frustrations of consumers with rising monthly service bills, during the previous
Congress we respectively introduced H.R. 3719, the Video CHOICE Act and H.R. 3720, the Next
Generation Television Marketplace Act.
The introduction of these bills reflected our belief that consumers should benefit from a truly
balanced marketplace in which rules and regulations do not limit consumer choice or force them
to buy certain tiers of channels before they can buy anything else. Unfortunately, one of the
impediments to enhanced flexibility and choice comes from legacy regulations that were written
at a time when most consumers had just one choice for video programming. Over the past 20
years, we've seen the addition of two national satellite video providers as well as the entry of
incumbent telephone providers into the video business. As a result of this enhanced competition,
today 99 percent of American homes have access to at least three pay-TV providers?
We are also sensitive to the time-consuming and costly requirements that the "effective
competition" provision places on cable operators, particularly small cable companies operating
in rural areas. To date, the FCC has already granted effective competition petitions covering over
10,000 communities, and the FCC has approved 99.5 percent of all the petitions filed since
2013.3 By adopting a rebuttable presumption, cable operators will not have to engage in long
and costly proceedings to offer subscribers more flexible packaging options or engage in pro-
consumer pricing practices, such as offering certain discounts and they will incur fewer costs that
will ultimately be passed on to consumers. Moreover, by reforming the petition process which
occupies extensive FCC time and resources, the FCC could save taxpayer dollars.
I Multichannel News, Kagan: Retrans Fees Rise to $9.3B By 2020 (October 27, 2014).
2 Annual Assessment of the Status of Competition in the Market for the Delivery of Video Programming at Table 2,
Federal Communications Commission (Adopted: March 31, 2015).
3 Notice of Proposed Rulemaking in the Matter of Amendment to the Commission's Rules Concerning Effective
Competition at Footnote 4, Federal Communications Commission (Adopted: March 16,2015).
We hope this will be the first of many common sense steps taken by the Commission to ensure
its rules reflect today's video marketplace. Thank you for your continued efforts to promote
healthy competition. consumer choice and continued innovation across the video marketplace.
Sincerely, :a..
. ~~~--
A G. Eshoo
. 1ember of Congress
Steve Scalise
Member of Congress