PHILADELPHIA — An appeals court overturned a rule that said a cable-TV company could not serve more than 30 percent of the nation’s subscribers. The verdict Friday was a victory for the largest cable company, Comcast Corp., which has 25 percent share and sued to block the rule.
It was an embarrassing decision for the Federal Communications Commission, which already had seen the cap rejected and imposed it again. Friday’s ruling from the U.S. Court of Appeals for the District of Columbia Circuit called the limit “arbitrary and capricious,” and threw it out.
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 by the courts. Two years ago, under then-FCC Chairman Kevin Martin, the same cap was reinstated, prompting the new challenge from Comcast.
In the ruling, the court noted — at times with sarcasm and thinly veiled incredulity — that the FCC sought to justify the previously rejected cap by recalculating its formula, but the outcome remained the same at 30 percent.
“The Commission concluded no cable operator could safely be allowed to serve — mirabile dictu (roughly “it’s a wonder to say”) — more than 30 percent of all subscribers,” the court said.
But the court noted that the FCC admitted its analysis did not fully reflect the impact of satellite-TV companies, which serve about a third of households with pay TV and could carry a network if major cable operators did not. Moreover, phone companies are offering TV services now and also could carry cable channels and contribute to their survival.
