Court's Decision to Throw Out Cable Ownership Cap Hurts Consumers

Today, a federal court threw out the Federal Communications
Commission's rule to cap cable ownership at 30%. The rule served as an
important consumers protection from media consolidation and growing
cable cartels, and encouraged diversity in ownership in the cable
industry. The court ruled the FCC's action as "arbitrary and
capricious," and said the Commission failed to consider competition
from other platforms, mainly satellite. The same court threw out the
rule in 2001, but it was reinstated by the FCC in 2008 due to fears of
growing market power of big cable companies.

Ben Scott, policy director of Free Press, made the following statement:

"It is regrettable that the court tossed out an important public
interest protection against excessive media consolidation.
Congressional intent in the Cable Act of 1992 is very clear - the goals
of federal policy in the cable industry are to promote competition,
consumer choice, and a diversity of programming. And yet today we have
a cable cartel - the video industry is dominated by only a handful of
large cable operators and studios.

"Today consumers experience perpetual price hikes by large operators
that already have market dominating purchasing power to decide the fate
of new channels. The promises of lower prices through competition from
satellite and telecom companies in the video business have never been
realized. We encourage the FCC not only to revisit cable ownership
limits, but to examine a variety of policy proposals to achieve
Congress's goal to bring consumers more competition and more choice in
the cable industry."