Viewpoint: Local Officials Risk Loss of Authority Over Cable Television.

@mayors and other local officials opposing Congressional passage of the Cable Telecommunications Act, or demanding unrealistic concessions, are running the risk of losing most of their authority over cable TV to the Federal Communications Commission. Mayors fighting the legislation, if successful, will have won a battle but will certainly lose the war.

The FCC made clear in two recent rulings that it will allow local authorities only a "quite narrow" jurisdiction over cable. Firing a loud warning shot across the bow of local officials, the FCC said it is concerned about--and presumably will strike down--any local regulation "that may impede new cable services and burden interstate communications."

James McKinney, chief of the FCC's Mass Media Bureau, sent an even louder warning to local and state communications regulators. In a recent speech before the Federal Communications Bar Association, he denounced them as "mini-FCCs," and said the real FCC is fully justified in preempting their power.

Otherwise, McKinney said, "the market place will be strewn with local regulatory waste and abuse. New technologies will grind to a halt and competition will disappear very rapidly as nationwide communications systems attempt to overcome dozens, perhaps hundreds of varying standards and philosophies."

McKinney declared bluntly that the FCC has the choice of totally preempting local authority now or being forced to preempt later after local officials "strangle local communications service and the federal government has to step in to protect the national communications system."

The only possible shield to protect local authorities from this threat of losing most of their power over cable to the FCC is the Cable Telecommunications Act now pending in Congress. The legislation would set limits on the FCC's preemption of local regulatory power.

Under the uniform national cable regulations established by the legislation, city officials would retain more authority over cable systems in their communities than they would if left to the mercy of the FCC.

That reach has taken away more and more local regulation of cable through a series of decisions dating back a dozen years. The FCC's two most recent rulings affirm severe limitations on state and local rate regulation and forbid virtually all local and state regulation of satellite master antenna television (SMATV) systems.

The rate decision specifically involved a Nevada case, but it is applicable nationally--and its implications for the powers currently claimed by many local jurisdictions are sweeping and ominous. The FCC ruled that its existing rules prevent Nevada officials from regulating rates charged cable subscribers, except for those channels carrying local "over-the-air" stations and those channels set aside for public, educational and government use.

In other words, the FCC ruled, local officials may not tell cable operators how much to charge subscribers for such popular cable services as the Cable News Network, ESPN, Home Box Office and USA Cable Network, whether these services are offered on a per-program, per-channel or per-tier basis.

As if this were not enough of a threat to municipal cable administrators, the FCC declared that it intends to preempt any other local regulatory policies which are "inconsistent with the federal objective of unregulated availability and "pricing" of cable and other non-broadcast communications services.

In the Nevada decision the FCC made clear that its longstanding preemption of rate regulation of all but basic cable service may apply not only to rates and types of services, but also to the manner in which cable is marketed.

"the current situation requires that system operators and non-broadcasting programming entrepreneurs retain maximum flexibility in the marketplace to experiment with the types of program offerings and methods to pay for such programs," the FCC ruling stated. "Continued federal preemption is needed to preclude artificial and unnecessary skewing of the market that non-federal regulation of entry and price could produce."

The FCC's preemption of virtually all local and state regulation of satellite master antenna systems specifically involved a New Jersey case but, again, its implications are far-ranging. The Commission ruled that state and local authorities may not impose regulations on SMATVs other than those necessary to protect the public health and safety and legitimate zoning restrictions.

Since cable television systems also receive most of their programs from signals transmitted by satellite and are technologically indistinguishable from SMATVs, the argument is formidable that the FCC should preempt more--or even all--local regulation of cable.

A point-by-point comparison clearly demonstrates that local officials would retain more authority over cable systems in their communities under the Cable Telecommunications Act than they would under existing and threatened FCC preemptions.

In the Nevada case the FCC made clear that local and state governments may not regulate rates charged for cable programs, except for so-called "must carry" signals of over-the-air channels and channels devoted to public, educational and government programming. And the FCC's McKinney hints the Commission may soon consider taking away even that limited power.

The FCC's Nevada decision suggests that local and state governments are generally prohibited from telling cable operators what services they may or may not carry and from dictating how the services are packaged. Local officials would retain far more power in this area under the legislation. They would be authorized to enforce all commitments in franchise agreements concerning cable services and video programming for the remainder of the franchise terms, subject to change only if circumstances have changed significantly. The legislation also would give local officials power to force cable operators to live up to franchise commitments for public, educational and government channels even if circumstances changed.

The big question looming over the cities, as the clock ticks on, is whether Congress will be allowed to enact a final version fast enough to preserve local authority over cable before the FCC totally preempts that authority.