FCC Opens Cable-Ownership Rulemaking


With a big cable merger pending, the Federal Communications Commission Tuesday decided to kick-start a rulemaking designed to place limits on cable ownership and the amount of affiliated programming a cable company can carry on its systems.

The FCC adopted the order unanimously under new chairman Kevin Martin as it prepares to review the acquisition of Adelphia Communications Corp. in a complex deal involving the two largest cable companies, Comcast Corp. and Time Warner Cable.

In March 2001, a federal court struck down FCC horizontal rules that limited one cable company to serving no more than 30% of pay TV subscribers nationally. The agency’s vertical limits allowed a cable company to use no more than 40% of its first 75 channels for affiliated programming, but the court struck down those rules, as well.

After picking up 1.8 million subscribers in the Adelphia transaction, Comcast CEO Brian Roberts said the company would serve about 29% of pay subscribers, based on 23.3 million wholly owned and 3.5 million partially owned subscribers and based on a pay TV universe of 92.2 million subscribers.

In a notice, the FCC said it wanted “to take a fresh look at rules that will foster competition and diversity in the video-programming market.”

Congress ordered the FCC to adopt cable-ownership rules in the 1992 Cable Act, but court setbacks and bureaucratic inaction ushered in long periods when no enforceable rules were in effect.

FCC Democrats Michael Copps and Jonathan Adelstein, in a joint statement, said they were disappointed that the record “has grown stale” since the 2001 court defeat, forcing the agency to seek a new round of public comment.

The two commissioners voiced support for the FCC’s determination that Congress mandated FCC adoption of cable-ownership limits and did not make it discretionary.

“Against this backdrop, we hope cable operators and other parties do not argue that there should be no numerical limits, but instead provide appropriate and necessary information to help us implement the clear command of the statute,” Copps and Adelstein said.