Courts

Cap Court Case Followers Weigh In

8/28/2009 1:06 PM Eastern

Reaction was coming in over the electronic transom Friday after a federal appeals court knocked down, and arguably trampled, a Federal Communications Commission decision maintaining the 30% cap on the number of subscribers any one cable operators can serve.

"All I can say is thank goodness we have the DC Circuit as a backstop of rationality when the administrative agencies run amok," said Ken Ferree, president of the Progress and Freedom Foundation and former Media Bureau Chief of the FCC. "The FCC's latest effort to impose a national cable cap was nothing more than "abracadabra - here's the limit." That's no way to run a government."

Randolph May of think tank The Free State Foundation, said it should be a warning to any FCC commissioners still wanting to take an overly "constrained view" of marketplace competition," adding: "The court's rebuke should be a warning to the new FCC not to let any 'ideological blinders' concerning mythical 'media concentration' get in the way of the actual marketplace realities."

"It is regrettable that the court tossed out an important public interest protection against excessive media consolidation," said Free Press Policy Director Ben Scott. "Congressional intent in the Cable Act of 1992 is very clear - the goals of federal policy in the cable industry are to promote competition, consumer choice, and a diversity of programming. And yet today we have a cable cartel - the video industry is dominated by only a handful of large cable operators and studios.

"Today consumers experience perpetual price hikes by large operators that already have market dominating purchasing power to decide the fate of new channels. The promises of lower prices through competition from satellite and telecom companies in the video business have never been realized. We encourage the FCC not only to revisit cable ownership limits, but to examine a variety of policy proposals to achieve Congress's goal to bring consumers more competition and more choice in the cable industry."

FCC chairman Julius Genachowski said Friday that the FCC still had a mandate in the Cable Act to "to adopt horizontal ownership limits to enhance effective competition in the cable television marketplace." So long as that satute remains, the commission is still free to set a cap, but it has to be able to justify it with some of the good data the commission under Genachowski has pledged to collect across all sectors.

He did not name names, but the only commissioner left who voted for the cap is Michael Copps, who remains the commission's most vocal critic of consolidation and market power.

Commissioner Copps had not released a statement at press time.

September