FCC Tries Again On Cable Ownership

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The FCC Tuesday launched its second attempt to set cable ownership limits since 2001, when the U.S. appeals court for the D.C. circuit tossed out previous limits.

Since that time the cable industry has operated without any restriction on one company’s size, although none are currently operating above the the FCC’s previous cap, which was 30% of all U.S. homes subscribing to cable or satellite.

Comcast, the largest company, reaches 23.2% of pay-TV homes. However, if the FCC approves Comcast’s plan to to divvy up assets of Adelphia with Time Warner, the company’s reach would grow to 25%.

Media Access Project has threatened to take the FCC to court if the Adelphia carve-up is approved before a new cable limit is imposed. MAP President Andrew Schwartzman said setting a limit has increased in importance because the pay-TV industry is more concentrated than it was in 2001.

Schwartzman said he supports new FCC Chairman Kevin Martin’s decision to seek a new round of comments on cable ownership because the record generated by the 2002 attempt is stale.

Nevertheless, Schwartzman doubted that the Republican Martin would set a limit low enough to gain MAP’s support for the final product.

Under previous FCC Chairman Michael Powell, the Media Bureau drafted a proposal to limit one MSO's national reach to 45% of U.S. pay-TV households.

That 2002 plan was never circulated to Powell’s fellow commissioners for a vote because he switched gears and decided to focus instead on rewriting broadcast ownership limits.

The broadcast rules, which included a 45% limit on one company’s TV household reach, were struck down by the federal appeals court in Philadelphia last summer.

The new cable ownership review seeks to refresh its record with public comment and empirical evidence that will help the commission set legally defensible limits on both the nationwide audience reach of any one cable operator and on the share of its channel lineup an operator may devote to in-house programming.

Specifically, the FCC is seeking comments examining the legal framework governing cable ownership, industry developments that might affect sustainability of cable ownership limits, relevant product and geographic markets, the economic basis for establishing specific limits, and the impact of cable industry consolidation.

Comments are due 30 days after the FCC’s notice of rulemaking is published in the Federal Record.

The new proposal does not suggest what the new levels for ownership caps should be, but makes clear that the FCC believes the 1992 Cable Act continues to give it authority to limit national reach and make sure MSOs don’t fill up their channel lineups with in-house programming,leaving no room for unaffiliated producers.

Democratic FCC Commissioners Michael Copps and Jonathan Adelstein were glad that the proposal went at least that far.

“We hope cable operators and other parties do not argue that there should be no numerical limits, but instead provide appropriate and necessary information to help us implement the clear command of the statute.”