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Comcast To Argue Against FCC Re-Imposition of Cap On Cable Operators' National Reach

Comcast won't be making its oral argument to the U.S. Court of Appeals, D.C .Circuit, until Friday, but according to its brief in the case, it will tell the judges that the FCC's re-imposition of the 30% cap on one cable operators national household reach is a "speech limit" that is unconstitutional, beyond the commission's authority, arbitrary and capricious, and contrary to the DC court's own instructions.

Unconstitutional, says Comcast, because it violates the First Amendment. Cable has no bottleneck power, says the cable operator, so re-imposing the cap is not the least restrictive means of achieving the FCC's goal. But even if it were only required to meet a "less restrictive" test it couldn't pass that one either.

Comcast argues that the commission has failed to recognize "dramatic changes" in the video marketplace that effectively prevent cable operators from "unfairly impeding the flow of video programming to consumers." Comcast argues that the FCC did not take into account the growth of satellite, whose subscribership has doubled since the 30% cap was thrown out--by the same court--in 2001. Since the court at that time told the FCC it would have to take the impact of DBS into account, its failure to do so represents a "fatal flaw."

Comcast will also argue that the FCC focused "illegitimately" on only one type of video programming--linear, 24/7 cable networks. "Congress did not permit a guaranteed 'survival rate' for specific video programmers," says Comcast.

To reach that "unauthorized" objective, the FCC relied on "conjecture, stale data, and faulty assumptions," says the cable operator.

Comcast has a lot of friends in its court challenge, including Bright House, Time Warner, Cablevision. Verizon is also supporting the cable operator.

Comcast, which is the only cable operator even close to the 30% cap with TK, filed the suit back in March 2008, calling the FCC decision arbitrary and capricious, as well as an abuse of its discretion.

The FCC majority -- in this case, Republican chairman Kevin Martin and the two Democratic commissioners -- voted back in December 2007 to reinstate that cap, with Martin saying that the fact that the FCC did not loosen it was, like the fact that it did not lift the newspaper broadcast cross-ownership ban entirely, a sign that the agency had listened to the complaints of anti-consolidation activists and concluded that no further cable deregulation was in the public

That FCC decision came after the same D.C. court instructed it in 2001 to either throw out the cap or better justify its continued existence, saying that DBS had not been taken sufficiently into account and even offering up a 60% cap as a possibility.

The FCC majority in 2007 responded to the court by saying that the 30% limit was "designed to ensure that no single cable operator or group of operators, because of its size, could unfairly impede the flow of programming to consumers."

That justification, Comcast argues, just doesn't cut it, and it will ask the court to throw the "ill-conceived and outdated rule."