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Comcast Renews Cable Cap Court Action

2/11/2008 7:04 AM Eastern

Washington -- Comcast Corp. on Monday renewed its promised to go to court in an attempt to block new cable ownership limits adopted by the Federal Communications Commission two months ago.

The FCC's rule bars a cable company from serving more than 30% of pay-TV subscribers nationally. The law on which the rule is based does not apply to satellite TV providers and other pay-TV providers not defined in the law as cable operators.

“In an era of increased and intensifying competition among telephone, satellite and cable companies, the case for a 30% cap is even weaker than when the courts rejected it six years ago, and we plan to challenge this [FCC] decision in the courts at our earliest opportunity,” said Comcast executive vice president David Cohen in a statement.

Comcast has already filed suit in response to the FCC's refusal to grant the company a waiver the set-top box integration ban. Along with Cablevision Systems Corp, Comcast is litigating the FCC's five-year extension of the program access rules.

Cohen's comments came just hours after the FCC posted the cable ownership rules and supporting commentary on its official web site. Comcast may file its appeal after the rules have been published in the Federal Register in a few weeks.

AT&T insists it is exempt from the 30% cap because its U-verse IP-video service does not meet the legal definition of a cable operator offering cable service over a cable system.

In his statement, Cohen said the FCC's decision to revive the cable cap -- which was rejected by federal court in 2001 and had lain dormant ever since -- made no sense after the FCC let SBC Communications acquire AT&T and then let the new AT&T buy BellSouth.

“As these FCC decisions have strengthened the hands of our Bell competitors, it is unthinkable that the government would constrain the ability of cable companies like Comcast to compete with these colossal companies that have virtually unlimited financial resources. In fact, AT&T alone has a market capitalization of $221 billion – larger than the entire cable industry combined,” Cohen said.

Comcast's market cap is about $52 billion.

FCC chairman Kevin Martin pushed to adopt the cable limit but he had to partner with the FCC's two Democrats to prevail. FCC Republicans Robert McDowell and Deborah Taylor Tate dissented.

Brian Dietz, vice president of communications at the National Cable & Telecommunications Association, said in a statement that "in 2001, the U.S. Court of Appeals soundly rejected on First Amendment grounds the precise cable ownership cap that the Commission adopted. The Court of Appeals found such a cap to be unjustified and out of touch with the competitive marketplace as it existed six years ago. In the intervening years, competition among satellite, telephone and cable companies and the variety and amount of independent programming has only increased. We are confident that a court will again reject conclusions that are completely at odds with the realities of a dynamic and competitive marketplace that is providing greater consumer choice and value.”

 

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