FCC to scrap local oversight of cable charges

Cable companies can increase customer rates without local government approval after the Federal Communications Commission voted to scrap a long-standing rule Wednesday.

States, cities and localities lost their ability to regulate rates in mixed 3-2 vote, part of which was unanimous. Providers previously had to get FCC permission to circumvent local rules, but the agency has granted nearly all requests in recent years.

Federal Communications Commission Chairman Tom Wheeler.
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Federal Communications Commission Chairman Tom Wheeler.

The rule, which had been in place since its passage in 1992, centered around competition. "Effective competition," as defined by Congress, meant that more than one cable company operated in a market.

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The industry's evolution to include satellite television and other platforms has led the FCC to conclude that competition exists in nearly all evaluated markets.

"It is only appropriate for the Commission to adopt a process that reflects the reality that effective competition exists throughout the nation, and provides relief to operators both large and small," said FCC Chairman Tom Wheeler in a statement.

Cable companies have supported the rule change. But some broadcasters had feared scrapping local oversight would allow cable providers to put certain stations in more expensive tiers.

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Wheeler added that, despite those fears, the FCC has found that the average rate for basic cable is lower in competitive markets than in noncompetitive areas.

(Disclosure: Comcast is the owner of NBCUniversal, the parent company of CNBC and CNBC.com.)