30% Cap On Tap


The Federal Communications Commission is planning to vote Dec. 18 to revive a rule that would prevent any cable company from serving more than 30% of all U.S. pay TV subscribers, according to the meeting agenda released just after 9 p.m. last Tuesday.

FCC chairman Kevin Martin wants to impose the cap to frustrate Comcast’s ability to make a big acquisition. With 26.1 million subscribers and 27% market share under FCC rules, Comcast could likely acquire Cablevision Systems’s 3.1 million subscribers, but probably not Charter Communications’s 5.3 million subscribers.

Time Warner Cable — with 13.3 million subscribers, or 14% of the 96.9 million pay TV subscriber universe — has a lot more headroom under the cap than Comcast.

The cable-ownership cap is also about Martin’s dogged campaign to inflict regulatory harm on cable operators and programmers until the industry agrees to Martin’s demand that all cable channels should be sold in an a la carte menu.

The 30% cap is expected to be adopted with FCC Democrats Michael Copps and Jonathan Adelstein joining Martin to produce at least a one-vote majority. It is unclear whether FCC Republicans Deborah Taylor Tate and Robert McDowell will end up voting with Martin.

The 30% cap was struck down by a federal court in 2001. Martin has yet to articulate a new justification for reviving the same rule. Comcast has denounced Martin’s cable ownership cap as totally unjustified given a video market that is far more competitive today than it was six years ago.

Comcast is highly likely to take the agency to court.

Prior to the vote re-regulating cable, the FCC is expected to adopt a Martin-backed rule that would allow a newspaper and a TV station to combine in a top-20 market, provided the TV station isn’t ranked among the top four and at least eight independent media outlets would remain afterward.

Some in Congress, however, are threatening to use legislative power to block or reverse the TV-newspaper consolidation vote. Martin is expected to pair with Tate and McDowell to pass the rule.

Also before the deregulatory vote, Martin wants the FCC to consider forcing cable to carry broadcast programming developed by women, minorities and small businesses. Three commissioners have asked Martin to withdraw the proposal.