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Free Press Calls on FCC to Open Inquiry Into Cable Market Competition

Consolidation critic Free Press has called on the FCC to open a broad inquiry into competition in the cable marketplace, similar to the FCC's just-announced inquiry into wireless phone/broadband competition, citing a D.C. federal appeal's court's scrapping of the 30% ownership cap as making that inquiry more necessary.

By contrast, cable operators counter, the court's decision argues for just the opposite.

In reply comments in the FCC's annual report on video competition, Free Press said that adding extra urgency was the D.C. federal appeals court's decision Friday throwing out the FCC's 30% ownership cap--again--as arbitrary and capricious.

Free Press said the issues that need spotlighting include horizontal consolidation, program carriage agreements, wholesale bundling, leased access, the terrestrial "loophole," and PEG channel issue.

The group argues that the MVPD marketplace is characterized by "increasingly high prices, dwindling network investment, and a lack of consumer choice amongst key aspects of the MVPD market."

The National Cable & Telecommunications Association, in its comments to the FCC Friday, countered that the court had effectively buttressed cable's argument that the MVPD space is incredibly competitive given the "virtual disappearance of vertical integration between cable operators and cable program networks" and the increasing competition from the Internet and others.

Comments were due Friday, so both groups had to move fast to work the decision into their comments since it was only released Friday morning.

NCTA quoted the court's finding that "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, and particularly in recent years. Cable operators, therefore, no longer have the bottleneck power over programming that concerned the Congress in 1992," the court concluded.

Citing the concerns by groups like free press over the issues NCTA suggests are now anachronisms, the cable trade group opined that "it is as if the trends recognized by the D.C. Circuit and soundly documented in at least the last three video competition reports had never occurred."

The FCC is currently trying to play catch-up, gathering information on several years worth of competition statistics and comment for reports that went unreleased in the previous administration.