Comcast was never expected to take the FCC proposal that all cable operators should be limited to reaching 30% of the US market lying down, and was always going to have to take the FCC to court over the issue.
It has now asked the US Court of Appeals for the District of Columbia Circuit to set the proposed rule making aside, describing it as arbitrary and capricious, as well as an abuse of its discretion. We’re not so sure.
There has always been a thought in the US that ownership of media is a way of controlling the political thinking of the nation and that curbs of some sort are necessary. This percentage wasn’t just pulled out of a hat but is similar to other media ownership rules
But that’s not why the FCC made this proposal, and said at the time that this was to do with increasing competition in the video market. If no operator is SO big that their refusal to accept a TV channel can kill off that channel, then the argument goes, it will make for a wider variety of programming. Cable operators don’t make TV programming (nor do they select individual programs) so the media ownership issues is not supposed to be at the heart of this rule.
All of which appears to be nonsense, given that the channels on YouTube are not carried by any cable operator and they do fine. Also there is no sense here that a combination of cable, and satellite and IPTV services might be limited to 30% of the nation, only cable. This looks like legislation that the RBOCs wrote themselves ready for lobbying against the old enemy.
Our guess is that a court may well find something wrong with this proposed rule making and send the FCC back for what is likely to be a one year rethink on the subject.
Comcast is biggest cable operator in the US and is so close to that 30% cap that it could not make a significant cable acquisition. Yet given the state of the US market, which now genuinely has more competition in voice and broadband carriage, and increasing rivalry on the pay TV front, than it has ever had, Comcast may well need to make acquisitions in future years and the Bush administration hasn’t exactly stopped AT&T making acquisitions.