Friday, August 28, 2009

Court Rejects FCC's Cable Market Share Cap

The U.S. Court of Appeals for the District of Columbia Circuit on Friday sided with Comcast Corp., in the cable television giant's appeal of the FCC's 30 percent horizontal ownership cap for cable operators. According to the court, the FCC failed to fully weigh competition from satellite TV providers such as Dish Network and DirecTV. The court called the FCC's action "arbitrary and capricious" and vacated the rule. "This important decision affirms that rules must reflect the changing realities of the dynamic video marketplace where today consumers have more choice in video providers and channels than ever before," Comcast spokeswoman Sena Fitzmaurice said.

Randolph May, a former FCC associate general counsel and head of the Free State Foundation, said the ruling was not unexpected. "There are commissioners who have persisted in wanting to take an overly constrained view of competition in the communications marketplace," he said, noting this is the second time in recent months the court has reversed an FCC policy. Progress and Freedom Foundation President Ken Ferree said he was glad the D.C. Circuit is there to serve "as a backstop of rationality when the administrative agencies run amok."

Media Access Project President Andrew Jay Schwartzman said he was disappointed but surprised with the ruling. "Although Congress directed the FCC to establish limits on cable ownership in 1992, the D.C. Circuit Court of Appeals has been disinclined to approve such regulations. It is hard to imagine that any rule the FCC could devise would ever withstand review under the standards established in today's decision," he said.

Schwartzman added the ruling is "not the end of the fight." "Big cable's anti-competitive ownership structure has increased prices and limited choices for the American public. Therefore, we will consult with the FCC on whether Supreme Court review is feasible," he said. If not, his group will urge Congress to pass legislation to mandate more choice and lower prices for cable TV. MAP represented CCTV, a Vermont public access TV producer, the Office of Communication of the United Church of Christ and the Center for Creative Voices in Media in the litigation.

FCC Chairman Julius Genachowski issued a statement saying his staff is reviewing the court's decision with respect to the limit previously adopted and the Commission will take the decision fully into account in future action to implement the law.