An amendment to allow states (not local franchising authorities or the FCC) to regulate rates of cable systems that are not subject to effective competition. Each state would have the option of assuming the regulatory and enforcement responsibilities of the FCC and local franchising authorities with regard to regulating basic cable rates and acting against unreasonable rates charged for higher tiers of service. The amendment provides that state guidelines for such regulation would have to be consistent with the bill's criteria for regulation by the FCC. If a state elects to assume such responsibilities, the amendment also permits states to regulate the rates charged for premium and pay-per-view channels.