FCC: 30% Cap Is Reasonable Limit To Prevent Program Bottleneck
Agency Said It Was Following Congressional Direction To Place "Reasonable Limits" On Sub Count
John Eggerton -- Multichannel News, 4/23/2009 5:33:33 PM
The Federal Communications Commission plans to tell a federal court Friday that it was simply following Congress' direction to place "reasonable limits" on the number of customers a single operators can serve when it decided in December 2007 to reinstate the 30% cap on cable subscribership.
Rather than a speech restriction, as cable contends, it was a "content-neutral" regulation, according to the FCC.
The commission will square off with Comcast in oral arguments in the U.S. Court of Appeals for the D.C. Circuit in Comcast's challenge to that decision.
According to the FCC's brief in the case, it chose a cap that "reasonably prevents any one cable operator from impeding the flow of video programming to consumers," and one based on "sound economic theory, substantial record evidence, and common sense."
The FCC contends that Comcast shouldn't even have standing to make the case because it did not show sufficient potential of being harmed by the rule. Comcast, the nation's largest distributor, is under the cap.
The FCC says it was well within its authority to use a survival analysis and calculate the cap according to the number of subs a programming network would need to survive if it could not get carriage on the largest operator.
While Comcast argues the FCC did not follow the court's instruction in 2001 when it required it to take satellite competitors into account when determining the cap, the FCC said it had "directly addressed that issue," and concluded that MVPD competition "would not have a significant effect on a large cable operators power to impeded the development of new programming networks."
It defended that conclusion with the argument that "for a variety of reasons, cable subscribers were not likely to switch to an alternative MVPD merely to gain access to a new network."
The FCC maintains its rule is reasonably tailored to achieve its goals and advances the important government interest of "ensuring public access to diverse information sources and promoting competition in the video programming market."\
Courts generally defer to the expertise of regulatory authorities, unless the rule is arbitrary and capricious." Comcast says it is. The FCC says it isn't. Now it is what the court ultimately says that matters.
In 2001, the same court threw out the cap as insufficiently justified.
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Maybe this case will open the can of worms that is begining to overflow as cable companies use VOD and increased promotion of their own local origination channels to undercut the rates for leased access they cry are too low. If leased access rates are too low, why does cable compete by offering airtime at even lower rates to the same prospects as LAPers?
Now let's get moving on the court case where cable succeeded in having a 'stay' on the new leased access rules. Perhaps this case can 'fire up' the FCC attorneys and they'll get active on the leased access court case.
Charlie Stogner - 4/27/2009 7:49:18 AM EDT -
Perhaps the FCC should also impose a 30% cap on satellite providers such as DirectTV. Since the FCC wants to ensure that no "programming bottlenecks" develop, expanding the cap to satellite providers would, in a feeble first step, bring the FCC more in line with the technology of today's video world.
Brian Conway - 4/24/2009 10:14:42 AM EDT
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