Thursday, March 22, 2012

FCC Must Free Cableco/CLEC Mergers From Section 652 Strictures

In an FSF Perspectives paper from August, I argued that the "Section 652 Cross-Ownership Ban Shouldn't Apply to Cable Operators and CLECs." The occasion for that paper was NCTA's petitioning of the FCC for either a declaratory ruling or a forbearance ruling regarding Section 652. The FCC was urged to make clear that Section 652 does not give local franchising authorities (LFAs) a veto over mergers between cable operators and competitive local exchange carriers (CLECs).

The FCC has not yet acted on the Section 652 petitions. Meanwhile, as I mentioned in a February blog post, the FCC approved the Time Warner Cable/Insight merger since none of the LFAs objected to the deal. But the uncertainty surrounding Section 652 remains. A March 20 ex parte filing by several industry trade associations – NCTA, ACA, and COMPTEL – make the case for the FCC to finally take action to clarify what Section 652 means for Cableco/CLEC mergers.
There is no good reason for the FCC to delay a ruling on Section 652. And there is no good reason to subject cable/CLEC mergers to LFA vetos. As I wrote in my Perspectives paper: "One way or the other – through a declaratory ruling or regulatory forbearance – the FCC should make clear that Section 652's unnecessary regulatory restrictions do not apply to mergers between cable operators and CLECs."