Wednesday, December 19, 2007

FCC Adopts 30% Cable Ownership Cap

The FCC is certainly baring its teeth against the cable industry. It sees no problem with allowing a media company to own multiple newspapers, TV and radio stations in the same market, but cap cable company ownership to no more than 30% of the market. Whether this is intended against all cable or primarily against Comcast, who currently reaches 27% of the market, is anyone's guess. Still it makes one wonder the intentions behind these decisions. You can own the bias of the news in the market but not how it is distributed.

Comcast is certainly a powerhouse at 27% so while they may not be to hurt in the short term, competing effectively with telcos and satellite, which have a more national footprint, may be problematic. At the end of the day, let free market rule or turn cable into a utility. Competition has never been more active in the market, among cable, telco and satellite. All have occurred without the FCC imposing their weight in the market. Why a cap now is unclear, other than to make a point, a spiteful one at that. Not talked about is whether the idea of Direct TV and Echostar merging would be allowed. While those discussions are no longer active, this decision by the FCC would seem to indicate that it would not be possible.

Could a denial to merge for Sirius and XM Satellite be far behind?