FCC Adopts 30% Cable Ownership Cap 

Move Stops Comcast From Acquiring More Cable Systems

By Ted Hearn -- Multichannel News, 12/18/2007 3:47:00 PM

Washington – As expected, the Federal Communications Commission adopted a rule Tuesday afternoon that bars any cable company in the U.S. from serving more than 30% of all pay-TV subscribers nationally.

The rule mostly likely stops Comcast from making a big cable acquisition since the largest cable company in the U.S. has 27% market share under FCC rules on how to count cable subscribers. The cable industry is expected to appeal the new rule in federal court.

The FCC’s action was approved by Republican FCC chairman Kevin Martin and the agency’s two Democrats, Michael Copps and Jonathan Adelstein – the same majority that voted Nov. 27 to slash cable leased access rates by 75%.

“Cable operators are no longer the gatekeepers they may have once been,” said FCC Republican Deborah Taylor Tate, who dissented with FCC Republican Robert McDowell from imposing a 30% cap.

In 2001, a panel of the U.S. Court of Appeals for the D.C. Circuit stuck down the same 30% came revived by the agency Tuesday. Both Tate and McDowell noted that the marketplace had changed dramatically in six years, including satellite TV’s growth from 18% to 30% market share.

“This order will be overturned by the D.C. Circuit,” McDowell declared.

Martin, saying the 30% cap responded to the court ruling, claimed the purpose was to ensure that no single cable company used its clout to make or break a cable company seeking carriage for the first time or a carriage renewal contract.

The FCC decided to postpone action on reviving rules that cap the number of channels a cable company may occupy with its own programming. The agency opted to seek more public comment on the topic in the months ahead.