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Under the new federal law, rates can be regulated only if the franchise area is not subject to "effective competition." The 1992 Cable Act deems effective competition to exist where (1) the cable operator provides service to fewer than thirty percent of the households in the area to which it has offered service; (2) one or more alternative providers (such as an another cable company) offer service to at least fifty percent of area households, and at least fifteen percent of area households take service from the nondominant cable provider; or (3) the franchising authority operates a cable system that offers service to at least fifty percent of area households. Unless one of these three conditions exists, the operator is subject to rate regulation. Since none of these "effective competition" tests are satisfied in most communities, most cable operators are now subject to rate regulation.

Under the 1992 Cable Act, basic and non-basic services and related equipment are subject to regulation, except where the programming is offered on a per-channel or per-program basis, as with HBO or a pay-per-view sporting event. Per-channel and per-program offerings are not subject to rate regulation. The basic service tier generally includes television broadcast signals and public, educational and governmental ("PEG") channels. The operator may also include other programming on the basic tier if it chooses to do so.

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Basic rates will not be regulated unless the franchising authority files a certification form (Form 328) with the FCC.

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