updated 02:55 pm EDT, Fri August 28, 2009
Comcast wins against FCC
Comcast has achieved a legal victory in its battle against the FCC's limits on the number of subscribers. The commission's regulations aimed to prevent a cable operator from unfairly blocking smaller competitors trying to reach consumers, although the 30 percent cap has been the focus of of numerous lawsuits and criticism.
"We agree with Comcast that the 30% subscriber limit is arbitrary and capricious," The US Court of Appeals ruling (PDF) reads. "We therefore grant the petition and vacate the Rule."
Comcast controlled approximately 27% of the market before filing its lawsuit, as it sat dangerously close to the cap. "We are pleased the DC Circuit has vindicated our position," Comcast said in a statement. "This important decision affirms that rules must reflect the changing realities of the dynamic video marketplace where today consumers have more choice in video providers and channels than ever before."
The 30 percent cap has been in place since the Cable Television Consumer Protection and Competition Act went into effect in 1992. The FCC was directed to "prescribe rules and regulations to ensure that now cable operator or group of cable operators can unfairly impede ... the flow of video programming from the video programmer to the consumer." Although the 30 percent limit has not changed, the methodology for determining subscriber numbers has been adjusted several times.
When the limit was initially imposed, consumers did not have the variety of alternative sources that are available today. Satellite has since developed into a formidable competitor, while the number of unique networks has increased significantly.
A US House Committee on Energy and Commerce report accused former FCC chairman Kevin Martin of holding a bias against the cable industry. The chairman was credited with reversing a ruling that gave cable providers more flexibility over pricing, while attempting to spearhead tighter regulations by accusing the industry of controlling more than 70 percent of the market.
Comcast has been involved in several disputes with the FCC. Aside from the subscriber caps, the provider has sued the commission in an attempt to avoid net neutrality. The FCC had investigated the company for VoIP blocking, along with other forms of traffic filtering deemed illegal. [via Broadband Reports]