Court Throws Out FCC's Cable Subscriber Cap [Telecom]

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Neal McLain 16 years ago

From Broadcasting and Cable website:

The U.S. Court of Appeals agreed with Comcast saying the > 30% subscriber limit is "arbitrary and capricious" > By John Eggerton -- Broadcasting & Cable, 8/28/2009
> Comcast and the cable industry have won a big victory in > court.
> The U.S. Court of Appeals Friday threw out the FCC's cap > on the number of cable subscribers one operator can > serve, saying the FCC was "derelict" in not giving DBS > its due as a legitimate competitor.
> "We agree with Comcast that the 30% subscriber limit is > arbitrary and capricious. We therefore grant the petition > and vacate the Rule," said the court, which concluded > that there was ample evidence of an increasingly > competitive communications marketplace and that cable did > not have undue control on the programming pipeline."
> But FCC Chairman Julius Genachowski suggested the court > decision would not be the last word on the cap.

Rest at

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Since I no longer work for, nor subscribe to, any cable TV company, this doesn't affect me. But I suspect that certain other TD readers will have opinions...

Neal McLain

***** Moderator's Note *****

This is probably old hat to those in the industry, but I'm confused: I didn't know there _was_ a limit, nor what it was supposed to accomplish. More details, please.

Bill Horne

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Neal McLain 16 years ago

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Since 1992, there has been a limit: no single cable TV company can serve more that 30% of the total number of cable TV subscribers in the country.

As to what it was supposed to accomplish, my (cynical) answer would be: nobody knows. Apparently Congress thought the FCC should be able to answer that question, but the FCC has never been able come up with an explanation that would stand up in court.

The story began with the Cable Television Consumer Protection and Competition Act of 1992. Among other things, this act directed the FCC to established market-share limits on the number of cable subscribers a given company could control. The FCC settled on 30%.

The cable TV industry sued the FCC to overturn this limit. The U.S. Court of Appeals for the D.C. Circuit tentatively agreed with the cable industry and remanded the case back to the FCC for further justification of how it arrived at 30%. The FCC affirmed the 30% limit; the industry sued again. This time the D.C. Circuit vacated the rule altogether and told the FCC to try again.

The cable industry's argument is that competition from satellite (DirecTV and Dish Network) render the rule unnecessary. The FCC's dilemma is that the Cable Act of 1992 requires it to come up with some sort of rule.

My guess is that the FCC will start all over and come up with some other percentage. Once again, the cable industry will sue and the DC Circuit will vacate. I suppose the FCC will just give up at some point unless Congress clarifies its intention.

Neal McLain

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Horn 16 years ago

May I (not so) humbly suggest that the FCC set the cap to 100%.

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harold 16 years ago

As pointed out by others, the FCC made this rule based on the Cable Television Consumer Protection and Competition Act of 1992 and the Cable Act Reform Provision of the Telecommunications Act of 1996. I believe the intention was to try to keep competition in the video delivery market. As the court points out, though, they did not consider satellite video delivery in their calculations.

The FCC rule is at

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.

The Cable Television Consumer Protection Act of 1992 is at

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The Telecommunications Act of 1996 is at

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Harold

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Court Throws Out FCC's Cable Subscriber Cap [Telecom]

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