FCC Again Addresses Possible Cable Ownership Cap
The FCC is seeking more comment and empirical evidence to aid its examination of cable horizontal and vertical ownership limits, it said Tues. Among issues in the 2nd further notice of proposed rulemaking is a requirement that the FCC set limits on a cable operator’s subscriber reach and the number of its own channels it can run on its system.
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There now is technically a cap on cable ownership. In 2001, the U.S. Appeals Court, D.C., reversed and remanded FCC rules that placed a 30% limit on cable ownership and a 40% limit on channel occupancy. Then FCC Media Bureau Chief Kenneth Ferree didn’t act on the item to review the cable limits because the Commission was handling revisions to its media ownership rules, said Media Access Pres. Andrew Schwartzman. “It’s been 4 years. This is long overdue,” Schwartzman said.
The FCC may be acting now on the issue due to cable deals pending before it, most notably Time Warner and Comcast’s move to buy Adelphia for $17.6 billion. Comcast might exceed the 30% subscribership cap if the old cable ownership limit applies. “Because of Adelphia, I'm sure they knew they had to act on this now,” Schwartzman said. The Commission does note that the 90-page item is intended to permit the Commission to “address a number of significant events that have occurred in the cable and related industries.”
But the FCC is unlikely to delay the Adelphia transaction until cap limits are resolved, said Paul Gallant, analyst at Stanford Washington Research Group. “This notice was inevitable given the thin record the FCC has got on a cable cap,” he said.
Comrs. Copps and Adelstein said in a joint statement they are “disappointed” it’s taken so long to resolve the issue. “The record we adduced before, limited though it was, has grown stale, and needs to be refreshed and updated,” they said. Once the record is compiled, Copps and Adelstein said, they want the FCC to move decide quickly. They also said they hope cable operators and others don’t argue that there shouldn’t be ownership limits “but instead provide appropriate and necessary information to help us implement the clear command of the statute.”
The FCC wants evidence and justification supporting or contradicting the legal framework governing cable ownership, industry developments that may affect development of sustainable cable ownership limits and the viability of proposals for setting limits suggested in the record in response to the 2001 notice. The FCC also wants to examine relevant cable product and geographic markets, the economic basis for establishing particular ownership limits and the potential benefits and harms of cable industry consolidation.