The 30 percent cap stems from a 1992 change to the nation's cable-ownership regulations by the FCC. Spurred by a concern that cable networks would have too few distribution outlets if the cable industry consolidated, the FCC decreed that no single company could serve more than 30 percent of the homes passed by cable companies. A few years later, the homes-passed metric was dropped in favor of total cable subscribers, but the 30 percent cap was kept in place.
In 2001, a federal court overturned the FCC's ownership limit and told the Commission to come up with a new set of guidelines for cable ownership. The new order in the works is a belated response to the 2001 ruling; in the intervening period, the FCC has continued to enforce the 30 percent limit, refusing to approve mergers where the combined entity would serve more than three in ten cable subscribers.
Last month, Comcast formally challenged the FCC's unofficial limit, forcing the FCC's hand. Comcast argued that the rationale for limiting ownership—a lack of outlets for broadcasters—was a "relic that cannot be justified." The cable giant points to the growing number of alternatives in the video marketplace, including the Internet, mobile phones, P2P networks, satellite, and other on-demand services as evidence that the market has changed to the point where a cap is no longer necessary.
FCC to cap cable ownership at 30 percent?
Posted on Saturday, Mar 17 2007 @ 05:05 CET by Thomas De Maesschalck
ARS Technica writes the U.S. FCC may soon reinstate its 30 percent cable ownership cap: