Charter says DirecTV Now is a competitive LEC
Details
Michelle Clancy
| 29 December 2018

Charter Communications says it should be let off the hook of regulatory interference in parts of Massachusetts and the Hawaiian isle of Kauai, using the argument that DirectTV Now, the streaming service, provides sufficient competition in those regions.



Charter, as the only facilities-based carrier in the areas in question, has an effective monopoly. That in turn means that the FCC regulates its pricing (basic cable rates and equipment fees) and business practices to a degree in order to protect consumers from price gouging and other problems.

However, the cableco met with FCC officials this month, arguing that even though the virtual MVPD requires a broadband connection (which, presumably, can only be provided by Charter), the availability of video service should mean that DirecTV owner AT&T should be considered a competing local exchange carrier (LEC) in the regions.

“We noted that, while one purpose of the Telecommunications Act of 1996 was to promote facilities-based competition between cable operators and local telephone companies, Congress took a broader approach in the LEC Test by specifying that it can be satisfied by the offering of video programming by a LEC or LEC affiliate ‘by any means’ other than direct-to-home satellite services,” wrote Charter in a 21 Dec. ex parte filing detailing the meeting.

In Massachusetts, Charter has a presence in 118 municipalities that don’t have effective competition under FCC guidelines.

“We also explained that even customers who do not choose to subscribe to DirecTV Now benefit from the availability of that service because competition from a LEC or LEC affiliate would impose a competitive check on the rates that cable services charge,” the filing continued.

“We also noted that while the LEC Test can only be satisfied by a multichannel video programming distributor ('MVPD') 'using the facilities of' a LEC or LEC affiliate, that provision is not a generally applicable facilities requirement,” Charter added. “Rather, we explained that the phrase 'using the facilities of such carrier or its affiliate' on its face applies only to MVPDs, including providers unaffiliated with a LEC—not to LECs or their affiliates in every instance.”