Moffet Sees Little M&A Movement From Cap-Killing

As a potential driver of new system mergers in the cable marketplace, a federal court's smackdown of the 30% sub cap Friday is "largely a nonevent."

That's according to BernsteinResearch senior analyst Craig Moffett.

In an advisory to clients, he points out that Comcast was the only one close to the cap, and at 25% of subs nationally, it could already have combined with Cablevision or Charter without reaching 30%.

He also points out that any merger would still have to be looked at by the FCC. He suggests a combo with Time Warner, which would create a company with about 38% sub reach, which would probably be rejected by the current FCC, which now has a Democratic majority.

Of course, the FCC that upheld the cap had a Republican majority, with FCC Chairman Kevin Martin teaming with the two Democrats.

Moffet says the victory may be "sweet vindication" after what he, and many others, have called an anti-cable era under Martin. He says he does not see it as "a meaningful precursor to any actual transactions," saying any ensuing M&A activity would probably have happened anyway.

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.