FCC Teeing Up Cable-Ownership Rules


The Federal Communications Commission is likely to tee up for its July 12
meeting a proceeding designed to revive cable-system-ownership rules that were
struck down in federal court in March, according to agency sources.

The commission's rules said a cable operator could not serve more than 30
percent of the nation's 85 million multichannel pay TV subscribers, but the U.S.
Court of Appeals for the District of Columbia Circuit ruled March 2 that the
limitation violated the First Amendment.

The court also struck down as a First Amendment violation an FCC rule that
said cable operators were barred from occupying more than 40 percent of their
first 75 channels with affiliated programming.

At the time of the ruling, AT&T Corp. was the only MSO that exceed the 30
percent cap, mainly through minority investments in Time Warner Entertainment
and Cablevision Systems Corp.

AT&T had until May 19 to divest its TWE stake in keeping with an FCC
condition in connection with AT&T's acquisition of MediaOne Group Inc. last

But the FCC suspended the TWE sale deadline March 16 after the court voided
cable-ownership rules on which the commission based some of the
AT&T-MediaOne merger conditions.