Comcast Uphappy With Martin’s Cable Cap


Washington – A senior Comcast official said Thursday it was “unthinkable” that Federal Communications Commission chairman Kevin Martin wants to impose ownership limits on cable after letting AT&T and Verizon complete large-scale mergers.

“Against the backdrop of these decisions that have strengthened the hands of our Bell competitors, it is unthinkable that the government would constrain the ability of cable companies like Comcast to compete with these colossal companies that have virtually unlimited financial resources,” Comcast executive vice president David Cohen said in a statement.

“AT&T alone,” Cohen added, “has a market capitalization of $231 billion -- larger than the entire cable industry combined.”

Martin, FCC and industry sources said Wednesday, has told the other FCC members to be prepared to vote Dec. 18 on rules that would reinstate cable system ownership limits, which have lain dormant since 2001 after a federal appeals court held that the agency’s cable restrictions were unconstitutional. The FCC’s old rule barred one cable company from serving more than 30% of pay-TV subscribers nationally.

“In an era of increased and intensifying competition among telephone, satellite and cable companies, the case for a cap is even weaker than when the courts rejected it six years ago,” Cohen said.

If Martin were able to revive the 30% cap, Comcast, with 26.1 million subscribers or 27% market share under FCC attribution rules, could probably add Cablevision, with 3.1 million subscribers, and fit under the cap.

But a deal to buy Charter’s 5.3 million subscribers probably wouldn’t fit. A 30% cap wouldn’t pose an immediate business risk to Time Warner Cable, which has 13.3 million subscribers, or about 14% of the 96.9 million pay-TV subscriber universe.

“Ironically, consumers will suffer the most from limiting cable’s ability to compete with these enormous conglomerates. By way of example, entry by cable companies in the residential phone market has saved consumers thirteen billion dollars this year, and will save over a hundred and ten billion dollars for consumers over the next four years. But these savings are possible only if cable companies are not constrained by unnecessary regulation," Cohen said.

Martin is also hoping to revive at the Dec.18 meeting one of the items jettisoned Tuesday night. That regulation would grant compulsory cable carriage rights to a handful of government-selected “designated entities” – a catch-all term that usually refers to minority and religious groups, plus small businesses – but only after these entities have secured voluntary spectrum leasing deals with local digital TV stations.