Court Overturns FCC’s Cable Subscriber Cap
Friday, August 28th, 2009The US Court of Appeals for the District of Columbia Circuit has overturned an FCC decision to impose a cap on cable companies – barring them from serving more than 30% of cable customers nationwide. The ruling reaffirms a 2001 court decision that rejected the same cap.
In vacating the FCC decision, the court found:
- The Commission had failed to demonstrate that allowing a cable operator to serve more than 30% of all cable subscribers would threaten to reduce either competition or diversity in programming
- The record is replete with evidence of ever increasing competition among video providers
- Satellite and fiber optic video providers have entered the market and grown in market share since the Congress passed the 1992 Act
- Cable operators no longer have the bottleneck power over programming that concerned the Congress in 1992
- Over the same period there has been a dramatic increase both in the number of cable networks and in the programming available to subscribers.
Citing, “overwhelming evidence concerning ‘the dynamic nature of the communications marketplace,’ and the entry of new competitors at both the programming and the distribution levels”, the court found the FCC’s decision to be arbitrary and capricious.
In response, FCC Commissioner Robert McDowell issued the following statement:
It was clear in December 2007, when I dissented from the FCC decision to once again impose a 30 percent national cap on cable system ownership, that the effort to re-justify the very same cap that the D.C. Circuit first struck down in 2001 was even more vulnerable to court challenge the second time around. Despite the Commission staff’s best efforts to provide post hoc empirical support for the chosen outcome, the court recognized that the 2007 analysis’ aging data and questionable assumptions sat oddly against the facts about new – and successful – competitors to cable systems in the multichannel video marketplace. It should go without saying that, in the future, outcomes in our proceedings should be driven by the facts and law, rather than the other way around.
