FCC OKs Cable Cap Limit, Tribune Deal

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A majority of the FCC's commissioners have voted to impose a 30% cap on the number of multichannel video subscribers any cable company could own, FCC sources confirmed at presstime.

No cable company would have to divest systems, not even top system owner Comcast, which is at 27%—but it prevents them from getting any bigger than that cap.

The item had been tentatively scheduled for a Dec. 18 vote at the FCC's public meeting, and may still get its official unveiling there.

FCC Chairman Kevin Martin had been dealt a blow earlier in the week when he could not get three votes for a finding that cable had reached a potential regulatory benchmark. But the FCC still has power independent of that finding to regulate the cable industry, and Martin continues to find ways to exercise it. He telegraphed this move back in March, when the proposal was circulated among the other commissioners, including the two Democrats who are on the record with their concerns about cable concentration.

Not all the votes have been cast, said a commission source, so the cap is not technically a done deal, and may not be released for several weeks as the commissioners work on their statements. One cable lobbyist pointed out that items the chairman appeared to have the votes for have not always turned out that way, but conceded in those cases no actual votes had been cast.

When the vote does become official, it will likely be taken to court by the cable industry.

Also, the FCC agreed to grant Tribune Co. the waivers it needs to complete a deal to sell the company to investor Sam Zell and its own employees.

Tribune has said it needed to get the waivers of its newspaper/broadcast cross-ownerships in five markets at least 20 business days before the end of the year so it could get the deal done by Jan. 1, or risk having it fall apart and the company sold for parts.

After commission Democrats complained that Chairman Martin was trying to condition the waivers on a December vote to loosen the cross-ownership ban, saying they were prepared to vote within three business days of getting a waiver proposal, Martin took them up on the offer. He circulated the item to them on Nov. 27 after a late-night meeting and said the vote could be done by Nov. 30. The waivers would be for two years, or six months after the end of any litigation over the current or new rules, whichever is longer.

Tribune Chairman Dennis FitzSimons was understandably buoyed by the prospects: “If approved, it will enable Tribune's going-private transaction to close by the end of the year. This will allow Tribune's local media outlets to continue their commitment to outstanding journalism and service to our readers, viewers, listeners and advertisers.”

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