Comcast 2014 Annual Report Download - page 23

Table of Contents
Must-Carry/Retransmission Consent
Cable operators are currently required to carry, without compensation, the programming transmitted by most local commercial and
noncommercial broadcast television stations. As an alternative to must carry, local broadcast television stations may choose to
negotiate with a cable operator for retransmission consent, under which the station gives up its must-
carry rights and instead seeks
to negotiate a carriage agreement with the cable operator. Such agreements frequently involve payments to the station. We
currently pay certain local broadcast television stations in exchange for their required consent for the retransmission of the stations’
broadcast programming to our video services customers and expect to continue to be subject to demands for increased payment
and other concessions from local broadcast television stations. Congress passed legislation in 2014, which, among other things,
directs the FCC to initiate a rulemaking to review aspects of its retransmission consent rules. We cannot predict the outcome of the
rulemaking or how it might affect our future retransmission consent negotiations. For information on must-
carry and retransmission
consent issues relating to our broadcast television business, see “NBCUniversal Segments — Broadcast Television”
below and
refer to the “Must-Carry/Retransmission Consent” discussion within that section.
Pricing and Packaging
The Communications Act and FCC regulations limit the prices that cable operators may charge for basic video service, equipment
and installation. These rules do not apply to cable systems that the FCC determines are subject to effective competition, or where
franchising authorities have chosen not to regulate rates. Approximately 80% of our video services customers are not subject to
rate regulation. From time to time, Congress and the FCC consider imposing new pricing or packaging regulations.
Cable Equipment
The Communications Act includes provisions aimed at promoting the retail sale of set-
top boxes and other equipment that can be
used to receive digital video services, and the FCC has adopted regulations implementing this policy. With the exception of certain
one-way devices, like digital transport adapters, these regulations prohibit cable operators from deploying new set-
top boxes that
perform both channel navigation and security functions. As a result, most set-
top boxes that we purchase must rely on a separate
security device known as a CableCARD. Congress passed legislation in 2014 that repeals this prohibition in December 2015. The
legislation also directs the FCC to establish a working group to report by September 2015 on software-
based security aimed at
promoting the retail availability of video devices. It is uncertain what, if any, steps the FCC will take in response to that report.
Pole Attachments
The Communications Act permits the FCC to regulate the rates, terms and conditions that pole-
owning utility companies (with the
exception of municipal utilities and rural cooperatives) charge cable systems and telecommunications carriers for allowing
attachments to their poles. States are permitted to preempt FCC jurisdiction and regulate the rates, terms and conditions of
attachments themselves, and many states in which we operate have done so. Most of these states have generally followed the
FCC’
s pole attachment rate standards. Until recently, the pole attachment rates applicable to telecommunications services were
significantly higher than the rates we have paid for cable and other services. In 2013, a federal court upheld changes to the FCC’
s
pole rate formula that reduce the rates for telecommunications service pole attachments to levels that are at or near the rates for
cable attachments. However, utility companies are able to rebut certain presumptions in the new FCC formula so as to justify higher
rates, and it is expected that most will attempt to do so.
Franchising
Cable operators generally operate their cable systems under nonexclusive franchises granted by local or state franchising
authorities. While the terms and conditions of franchises vary materially from jurisdiction to juris-
Comcast 2014 Annual Report on Form 10
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