News

FCC Aide: Martin Wants 30% Cable Cap

3/13/2007 10:23 AM Eastern

Washington -- A cable operator would be barred from serving more than 30% of pay television subscribers under a proposal backed by Federal Communications Commission chairman Kevin Martin, an FCC official said Tuesday.

Martin’s support for the 30% limit puts him at odds once again with cable’s largest company, Comcast, which has advocated elimination of a rigid ownership limit, citing "revolutionary changes" in the video-programming-distribution market.

Martin distributed a cable-ownership order to the four other FCC members Monday night, six years after a court told the agency to draft new rules.

“It’s 30%,” Rudy Brioche, legal adviser to FCC Democrat Jonathan Adelstein, told reporters after an appearance Tuesday at the Cable Television Public Affairs Association Forum 2007 here.

The FCC’s next public meeting is March 22, but Brioche didn’t think the agency would vote on the cable-ownership item at that time.

Martin is seeking to revive a 30% subscriber cap that a panel of the U.S. Court of Appeals for the D.C. Circuit voided in March 2001 as inconsistent with cable’s First Amendment protections.

Martin, Brioche said, wants to launch a separate rulemaking on cable-ownership-attribution rules. Under current FCC rules -- upheld by the D.C. Circuit in the same 2001 ruling -- if one cable company owns at least 5% of a second cable company, their subscriber totals are combined to determine compliance with the 30% cap.

Martin’s office declined to comment on the ownership issues Tuesday.

The FCC does not limit a satellite-TV provider's growth, nor does it control the number of voice customers AT&T or Verizon Communications may serve.

“AT&T alone is larger than the entire cable industry,” National Cable & Telecommunications Association president Kyle McSlarrow said in a separate CTPAA appearance Tuesday.

Citing Kagan Research, Comcast recently told the FCC that it serves 26.2 million subscribers, or 27% of the country's 96.8 million pay TV subscribers. Under a 30% cap, Comcast could, in a few years, find itself refusing service to customers seeking to sign up for its fast-growing voice-video-data triple-play bundle. The 30% cap would also effectively block Comcast from buying a cable company with more than 3 million subscribers.

Any FCC order adopting the same 30% cap tossed out by the courts would be “astonishing,” McSlarrow said, adding, “Apparently, that’s what they are taking a look at. In this day and age, given the competitive environment, the right answer is to say that there is no cap.”

Martin’s support for a 30% cap shouldn't come as a surprise to the cable industry. Since taking office in March 2005, he has complained about cable-rate increases and the industry's refusal to provide programming on an a la carte basis. He ordered his staff to reject a set-top-box wavier sought by Comcast, which the MSO sought in an effort to transition its network to digital-only in the most efficient manner economically.

Now, Martin is pushing for rules that would force cable carriage of additional local-TV-station programming.

“I would say he’s not been easy,” McSlarrow said.

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