Comcast Sues FCC Over 30% Cap

The Federal Communications Commission continues to draw a lot of legal fire for its decisions.

In the wake of almost two-dozen legal challenges of its newspaper-broadcast cross-ownership ruling, the FCC was hit again Wednesday by a suit from Comcast over its decision to reinstate a 30% cap on cable's share of multichannel-video providers.

Comcast telegraphed the move, saying back in February that it planned to sue the commission "at our earliest opportunity." Comcast is the nation's largest cable operator and the closest to the 30% cap at about 27% of multichannel-video providers.

The suit, filed in the D.C. Circuit, called the FCC decision arbitrary and capricious, as well as an abuse of its discretion.

Comcast executive vice president David Cohen told B&C in February just what Comcast thought was wrong with the decision: "The record at the FCC provided absolutely no support for a horizontal ownership cap of 30% -- a position that has been supported by the courts," Cohen said at the time. "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."

He also saw some telco favoritism in the move. “The FCC action in this case is perplexing from the same commission that approved the largest telecommunications deal in history with the AT&T merger," Cohen said in February, "as well as two other Bell company mega-mergers in the past three years. 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."

The FCC majority -- in this case, Republican chairman Kevin Martin and the two Democratic commissioners -- voted 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 cross-ownership ban entirely, a sign that the agency listened to the complaints of anti-consolidation activists and concluded that no further cable deregulation was in the public interest.

The commission justified the cap, as a court directed it to, by saying that the 30% limit was "designed to ensure that no single cable operator or group of operators, because of its size, can unfairly impede the flow of programming to consumers."

John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.