Court rejects FCC rule to cap cable subscriber market share at 30 pct, handing Comcast victory

Court rejects FCC 30 pct cap on cable market share

PHILADELPHIA — An appeals court on Friday overturned a rule that said a cable TV company could not serve more than 30 percent of the nation’s subscribers. The verdict was a victory for the largest cable company, Comcast Corp., which has 26 percent share and sued to block the rule.

The U.S. Court of Appeals for the District of Columbia Circuit ruled that the cap, imposed by the Federal Communications Commission, was “arbitrary and capricious,” and threw out the restriction.

Fearing a cable monopoly, Congress in 1992 directed the FCC to set limits on how many customers cable TV operators could reach nationwide.

The FCC set the 30 percent limit, but that was thrown out twice before by the courts. Two years ago the cap was reinstated, prompting the new challenge from Comcast.

FCC Commissioner Robert McDowell said he had disagreed with the commission’s decision to re-impose the cap in 2007 because he felt the rule was vulnerable to a challenge given that it was already overturned in 2001. He said that the commission’s cap was based on “aging data and questionable assumptions” that didn’t adequately reflect the entry of new competitors to cable operators.

“In the future, outcomes in our proceedings should be driven by the facts and law, rather than the other way around,” McDowell said in a statement.