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FCC: 30% Cap Is Reasonable Limit To Prevent Program Bottleneck

The FCC plans to tell a federal court Friday that it was simply following Congress's direction to place "reasonable limits" on the number of subs a single subscriber can serve when it decided in December 2007 to reinstate the 30% cap on cable subscribership.

Rather than a speech restriction, as cable contends, it was a "content-neutral" regulation, says the FCC.

The commission will square off with Comcast in oral argument in the U.S. Court of Appeals for the D.C. Circuit in Comcast's challenge to that decision.

According to the FCC's brief in the case, it chose a cap that "reasonably prevents any once cable operator from impeding the flow of video programming to consumers," and one based on "sound economic theory, substantial record evidence, and common sense."

The FCC says Comcast shouldn't even have standing to make the case because it did not show sufficient potential of being harmed by the rule. Comcast, the nation's largest operators, is under the cap.

The FCC says it was well within its authority to use a survival analysis and calculate the cap according to the number of subs a programming network would need to survive if it could not get carriage on the largest operator.

While Comcast argues the FCC did not follow the court's instruction in 2001 when it required it to take satellite competitors into account when determining the cap, the FCC said it had "directly addressed that issue," and concluded that MVPD competition "would not have a significant effect on a large cable operators power to impeded the development of new programming networks."

It defended that conclusion with the argument that "for a variety of reasons, cable subscribers were not likely to switch to an alternative MVPD merely to gain access to a new network."

The FCC says its rule is reasonably tailored to achieve its goals and advances the important government interest of "ensuring public access to diverse information sources and promoting competition in the video programming market."

Courts generally defer to the expertise of regulatory authorities, unless the rule is arbitrary and capricious. Comcast says it is. The FCC says it isn't. But, it is what the court ultimately says that matters.

In 2001, the same court threw out the cap as insufficiently justified.

John Eggerton
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.