FCC Reaffirms, Clarifies Reasoning For, 30 Percent Cable Systems Ownership Ceiling
The FCC has just affirmed a December, 2007 ruling limiting U.S. cable operators from owning a full or substantial interest in cable systems werving more than 30 percent of overall U.S. cable tv subscribers.
"Our decision implements the statutory directive that we impose a limit 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," the FCC said on its website. " Our action also responds to the court’s concerns in Time Warner Entertainment Co. v. FCC (“Time Warner II”), that the Commission had failed adequately to justify the 30 percent limit. "
The FCC then described the methodology and reasoning for that 30 percent ownership ceiling.
In establishing the 30 percent cable horizontal ownership limit, we rely on a modified “open field” approach to ensure that no single cable operator becomes so large that a programming network can survive only if that operator carries it.
To calculate a horizontal limit that meets this test, we first determine the minimum number of subscribers a network needs in order to survive in the marketplace and then estimate the percentage of subscribers a network is likely to serve once it secures a carriage contract.
The resulting calculation indicates that an open field of 70 percent and an ownership limit of 30 percent are necessary to ensure that no single cable operator is able to impede unfairly the flow of programming to consumers.
We haven't heard the latest from the FCC in this matter.
"In the Further Notice of Proposed Rulemaking, we seek further comment on (1) whether to retain the single majority shareholder attribution exemption, which currently applies to the cable and broadcast ownership rules; (2) whether, under the cable attribution rules, a limited partner may sell programming to the partnership and retain insulation; and (3) whether the Commission should clarify certain aspects of the cable Equity Debt (“ED”) attribution rule, as it did for the broadcast Equity/Debt Plus attribution rule," the FCC added. "We also invite comment in the Further Notice on an appropriate channel occupancy limit, because the record evidence so far is inadequate to allow us to set such a limit."
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