Chamber Disappointed With FCC Decision to Resurrect Limits on Cable Ownership

WASHINGTON, D.C.—The U.S. Chamber of Commerce today expressed disappointment with the Federal Communications Commission's (FCC) decision to re-impose a rule, previously struck down by the D.C. Circuit, that prohibits any cable company from serving more than 30% of all pay-TV subscribers in the United States.

"Today's decision by the FCC fails to recognize that vibrant competition exists in the multichannel video market and that consumers have more programming choices than ever," said William L. Kovacs, Chamber vice president for Environment, Technology, & Regulatory Affairs.

Consumers can choose among hundreds of channels and can receive their service from cable, DBS, or new entrants, such as their local phone company. DBS alone has 30 million subscribers and 31% of the subscribers to multichannel video services. In 2005, the FCC identified 531 satellite-delivered national programming networks, an increase from 388 networks in 2004. Of the 531 networks, only 116 networks (21.8%) were owned by a cable operator.

"Cable, phone, satellite, and wireless companies are all vying to provide the same suite of video, data, and voice services. In this environment, regulatory parity is essential. Singling out the cable industry to limit its ability to achieve economies of scale only serves to skew the playing field, create regulatory uncertainty, hinder infrastructure investment, harm innovation, reduce consumer choice, and slow the deployment of new technologies," said Kovacs.

Moreover, the Internet is changing how people view video. Streaming video and Web sites featuring user-generated content are creating new distribution channels for programming. According to a recent In-Stat survey, 30% of respondents said they would drop their pay TV service and rely on the Internet for TV entertainment.

The FCC's decision fails to repair the fatal flaws identified by the D.C. Circuit in its earlier decision rejecting the ownership limit. Since there is no market failure that justifies reviving the 30% cap, or any limit on horizontal ownership, the rule must be considered anticipatory regulation and the Court specifically held that any cap must be based on real, not "conjectural," harm.

The U.S. Chamber of Commerce is the world's largest business federation, representing more than 3 million businesses and organizations of every size, sector, and region.

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