Court Action Likely To Stop FCC Cable Cap

COURT ACTION LIKELY TO STOP FCC CABLE CAP
[SOURCE: Multichannel News, AUTHOR: Ted Hearn]
The cable industry, probably led by Comcast, will likely ask a federal court to strike down a new cable ownership restriction adopted Dec. 18 by the Federal Communications Commission. The rule bans a cable company from serving more than 30% of all pay-TV subscribers nationally. The cable cap is designed to ensure that a large cable MSO can’t mark or break an unaffiliated programmer by denying to initiate carriage or refusing to extend a carriage contract. The 30% cap is the same limit that a federal court struck down in March 2001, although FCC Democrat Michael Copps promised that “the underlying economic justification is quite different [and is] completely responsive to the issues raised by the [court].” Stifel Nicolaus analyst Blair Levin and David Kaut all but predicted a cable victory in court. “We believe the FCC will again face an uphill battle to defend the 30% cap … given another expected cable challenge,” they said in a client note shortly after the FCC vote. FCC enforcement of the 30% limit would frustrate Comcast’s ability to make a big cable acquisition. Comcast has 26.1 million subscribers for 27% pay-TV market share under FCC rules. The FCC’s cap would rule out a Comcast combination with either Time Warner, Cox or Charter. Keeping Comcast penned in helps AT&T and Verizon preserve their territorial dominance over cable.
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