PROPOSED FCC RULES ON CABLE OWNERSHIP CAP DUE SOON

FCC will issue further notice of proposed rulemaking “in the next month or 2” on cable ownership limits, Cable Services Bureau Chief Ken Ferree told reporters in his first media briefing Wed. U.S. Appeals Court, D.C., in March remanded ownership rules, which limit given provider to 30% of cable and DBS market, back to FCC. Ferree, referring to harsh language criticizing Commission’s decision-making in court decision, said: “We want to be very careful to support whatever we do the next time around… I will not have a case sent back with the kind of language that was in the last ownership reversal.” He also dismissed any link between cable consolidation and rising cable rates, and said bureau was working “feverishly” on open access issue.

Cable ownership issue has dominated bureau’s agenda this year, with FCC giving AT&T waiver on its ownership conditions related to its acquisition of MediaOne after court remand. In addition, some on Capitol Hill have called for raising or eliminating cap, move supported by NCTA. Speculation among analysts is that FCC will raise limits to as high as 50-60%, which no existing operator would approach. That could change, however, if AT&T Broadband, largest cable operator in U.S., is sold to Comcast or AOL Time Warner (see separate report, this issue).

FCC will need to demonstrate to court why ownership cap below antitrust threshold was necessary. “I always have Judge [Harry] Edwards sitting on my shoulder,” Ferree said, referring to appeals court judge for whom Ferree once clerked. “We're going to have to look closely at what limits are appropriate,” he said, “and do a rigorous analysis to really justify those limits.” Ferree said he was “sensitive” to concerns about rising cable rates, but repeatedly said he had seen no evidence that consolidation of cable providers would lead to higher rates: “I'm not so sure there’s a correlation.”

Ferree called open access “a high-priority proceeding.” Comment period on notice of inquiry closed some time ago and he said bureau staff was working on it. “We don’t have a definite timeline” for release or know whether it would lead to rulemaking, he said. However, he acknowledged that pressure was increasing on FCC to act: “Court cases are still bubbling up all over the country, and the FCC has to take a position on the issue.” All of lower court rulings on open access have said it’s federal issue that should be resolved by FCC, most recently decision in 4th U.S. Appeals Court, Richmond, Va. (CD July 13 p5).

Responding to queries about his personal TV habits, Ferree said he has Cox cable service with cable modem but not digital cable. He had few complaints about his service, “always, inevitably” finding something to watch among 100 or so channels on his system. But he admitted that until recently he watched little TV, as he and his wife imposed stringent restrictions on viewing by their 7-year-old daughter and 5-year-old son.