Next steps in Spectrum case up to the FCC
No timetable for when agency will make decision on issue
Now that the public comment period is over in the case filed by Yuma and other cities against Spectrum’s parent company, Charter Communications, the next steps are up to the Federal Communications Commission.
The agency may ask for more information, hold oral arguments, an evidentiary hearing, or refer the matter to an administrative law judge for a hearing of specific issues. There is no timetable for when the FCC will issue its decision.
Yuma joined Jackson, Wyo., Crescent City, Calif., and El Centro, Calif., in filing a complaint with the FCC against Charter on March 15, charging that the cable provider “willfully violated” the 30-day notice requirement contained in the commission’s rules by failing to provide any advance notice of its intent to remove local channels from the cable lineup.
On Feb. 2, Charter removed the local affiliates of NBC, CBS and the Spanish station Estrella, all owned by Northwest Broadcasting, from the cities’ cable lineups. The complaint says that none of the cities nor subscribers were notified by Charter until after the channels were removed.
The complaint also noted that the removal equaled an increase in the rates paid by customers, also made without the required notice, since customers are now receiving less services than they contracted for.
The municipalities are asking the FCC to declare that Charter has violated the federal rules and order the company to correct “any misrepresentation that the channel deletion did not involve fault on the part of Charter.”
Charter/Spectrum has denied any wrongdoing. Spokesman Dennis Johnson issued this statement on Wednesday: “Spectrum did not violate the FCC’s notice requirements for customers or local franchise authorities because the removal of Northwest Broadcasting TV stations like KYMA, KWST and Estrella TV was not in our control — but rather was a result of Northwest no longer authorizing Spectrum to carry its stations. As soon as Northwest terminated its authorization for us to retransmit its broadcast signal, we notified affected customers and local franchise authorities.”
The FCC accepted comments from the public on the case until April 26.
CHARTER/SPECTRUM’S REPONSE
Also on April 26, Charter filed a 52-page response to the complaint, which “emphatically denies” the allegations and asks the FCC to deny the petitions. Charter asserts that the cities are holding Charter responsible for Northwest’s decision to withhold its programming from Charter and its customers to gain leverage in retransmission consent negotiations.
Charter says that FCC rules require a cable operator to provide 30 days advance notice of a change in programming services only with respect to changes that are “within the control” of the cable operator. Charter alleges that the programming change in this situation was not within its control since Spectrum does not own or control the broadcast signal or the content transmitted by local stations and cannot carry the stations without explicit consent from Northwest.
As required by the FCC’s rules, Charter says it provided notice of the blackout to its Yuma, Jackson, El Centro and Crescent City subscribers “as soon as possible” after learning that Northwest had terminated its authorization for Charter to retransmit the stations.
Charter also claims that it is not under legal obligation to adjust subscriber bills or issue refunds to subscribers. “Just as Charter negotiates retransmission consent with local broadcast television station owners on a nationwide basis, the Broadcast TV Surcharge is determined on the basis of Charter’s anticipated nationwide retransmission consent costs and collected on a national, per subscriber basis.
Charter therefore does not adjust the Broadcast TV Surcharge each time a local broadcaster’s station or stations are added or removed from its cable systems.”
Charter says that mandated refunds would constitute “impermissible rate regulation since none of the Municipalities is certified to regulate basic cable rates, and Charter’s Terms of Service expressly preclude subscribers from seeking refunds in the event of a blackout.”
CITIES’ RESPONSE
On May 7, the cities filed a reply to Charter’s response. According to the 30-page document, Charter’s response did not offer evidence that excuses, justifies or absolves the company of blame and “merely attempts to shift blame and obfuscate the core issue.”
The cities allege that Charter had “more than sufficient control” by either avoiding the blackout or deferring it long enough to comply with FCC regulations. “Charter instead chose to deprive consumers of programming they continue to pay for, without notice, and in direct violation of the Commission’s rules,” the reply says.
The cities questioned the Broadcast TV Surcharge being paid by Spectrum customers. “Charter asserts that it is legal on the basis that it is a cost passthrough yet simultaneously insists it cannot be reduced as it does not actually reflect the costs Charter incurs for broadcast programming.”
The cities argue that the charge is a violation of the FCC’s billing rules and that having represented that it is a “pass-through” rather than something else, it is obligated to live with the consequences of that representation and refund the amounts it saved by dropping the broadcast channels.
“It can always increase rates should it desire to do so, but it must do that in accordance with FCC rules,” the reply notes.
The cities are calling for the FCC to fine Charter with penalties “to ensure these violations of the Commission’s rules do not become standard practice, and refunds ordered paid to subscribers.”
The cities are now waiting for the FCC to take action. Neither party may file additional pleadings or motions unless requested to do so by the FCC or on a showing of extraordinary circumstances, Dave Nash, Yuma’s public affairs coordinator, said.
“Although not anticipated in this case, federal regulations give the FCC discretion to order discovery, hold oral arguments, an evidentiary hearing, or refer the matter to an administrative law judge for a hearing of specific issues,” he explained.