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The US Federal Communications Commission on Wednesday adopted new franchising rules designed to make it easier for leading telecommunications groups to offer television services in competition with cable operators.

The new rules, aimed at cutting costs for consumers, come amid unprecedented levels of direct competition between cable and telecoms rivals as they seek to lure customers with a bundle of multi-channel television, high-speed internet and telephone services.

The rules, approved in a split 3:2 vote along party lines, were condemned by cable operators, and they indicated they could challenge them in the courts.

“Today’s order doesn’t provide a level playing field, a concept that has been universally supported up until now at federal, state, and local levels,” said the National Cable and Telecommunications Association, which represents the leading cable operators. It questioned whether the FCC “has the legal authority to establish separate regimes for incumbents and new entrants”.

The rules, designed to limit “unreasonable delays” imposed by local authorities considering franchise applications from new entrants, could also further stoke concerns among Democrats about the FCC’s policies under Kevin Martin, its Republican chairman.

The new regulations could affect the speed at which telecoms groups such as AT&T and Verizon can roll out their television offerings, which are only available in small parts of the US.

Ahead of the ruling, John Dingell, the incoming Democrat chairman of the House energy and commerce committee, questioned whether the FCC had the legal authority to issue rules that would make it easier for new competitors to enter the television business.

On Wednesday Jonathan Adelstein and Michael Copps, the two Democrats on the commission, also criticised the measure, questioning the agency’s evidence that there are barriers to entry by competitors.

Unless challenged in court, the new FCC rules will require local cable franchising authorities to speed up reviews of new applications from competitors with access to local rights-of-way within 90 days, and within six months for other new competitors.

The FCC rules will also ban local governments from forcing new competitors to build new systems more quickly than incumbent carriers and to count certain costs required of new carriers to go towards the 5 per cent franchise fee they pay.

“The FCC is standing up for consumers who are tired of skyrocketing cable bills and want greater choice in service providers and programming,” said Susanne Guyer, Verizon Communication’s senior vice-president for federal regulatory affairs.

Critics claim there are no guarantees that the entrance of AT&T and Verizon will result in lower prices.

Copyright The Financial Times Limited 2017. All rights reserved.
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