Cable Regulation: Will FCC History Repeat?

The sleeper issue of cable-ownership regulation could become a case of déjà vu at the Federal Communications Commission, which is still absorbing criticism from its June 2 liberalization of broadcast ownership rules.The question, once again, is whether to buttress or to gut a regulation under attack by a federal court, in this case the rule limiting the reach of cable operators to 30 percent of the national audience. Although Republican chairman Michael Powell set a firm schedule for deciding the broadcast rules, he has not indicated when the FCC will finish its cable-ownership review, which began in September 2001. Powell late last month rejected a draft regulation from senior staff, FCC officials said last week. Critics say regulation will result in big cable jacking up prices while denying an audience to programming it does not own (another part of the rule limits how many channels a cable operator may own)."Let's be clear about what this is: It's not a new and separate issue but rather part and parcel of the media-ownership questions we dealt with so miserably just two months ago," said commissioner Michael Copps, one of two Democrats on the FCC's five-member body and a vocal critic of the broadcast-ownership liberalization. "I hope we won't see here the same majority mentality that appears to want nothing more than to flash the green light for more consolidation." FCC officials last week said they don't have enough information to justify new regulations before a skeptical U.S. Court of Appeals, which in March 2001 said the FCC needs to do a better job of explaining why its 30 percent rule makes sense.Cable companies seem content to sit back and let the FCC grope its way toward what most assume will be a relaxation of the ownership cap. "It would be difficult, given the [2001] court ruling, for the number not to go up," said Legg Mason analyst Blair Levin, an ex-FCC official. "The question is, how much?" Inside-the-Beltway speculation centers on a limit of 40 or 45 percent. FCC officials declined comment on the most recent proposal.The nation's largest cable company, Comcast, with 21 million cable customers, says it serves 29 percent of homes that subscribe to multichannel services such as cable and satellite. It opposes a 30 percent limit, which it said in a recent financial statement "would restrict our ability to take advantage of future growth opportunities."While the company declined comment, in filings with the FCC, Comcast said there is "no evidence" to justify an ownership limit. As for dominating programming, it said the facts indicates otherwise, with satellite emerging as a vigorous competitor and the percentage of programming networks owned by cable operators dropping since the early '90s.Public-interest groups counter that the limit is needed to restrain the largest cable owners from growing to anti-competitive proportions. Direct-broadcast satellite serves a narrow elite, and cable operators can suppress independent programmers by manipulating prices, said Harold Feld, associate director of the Media Access Project."The truth is out there, and the FCC can't handle the truth," said Feld.Critics "have got it wrong," said one FCC official. "Frankly, the record needs more work if we are to establish enforceable limits, which is what we want to do."

Brand Marketing

Cable Regulation: Will FCC History Repeat?

Todd Shields

About

Subscriptions

Events

Publications

WORK SMARTER - LEARN, GROW AND BE INSPIRED.

Subscribe today!

Todd Shields