CONSUMER GROUPS ASK FOR MORATORIUM ON COMCAST, TIME WARNER DEALS

Consumer groups called for a moratorium on the FCC’s allowing Comcast or Time Warner Cable to acquire new systems, at least until the Commission has adopted a cable horizontal ownership cap. Media Access Project and the Georgetown U. Law Center -- on behalf of Consumers Union, Consumer Federation of America and the United Church of Christ -- told FCC Chmn. Powell in a letter that they were concerned about recent talk by Comcast and TWC officials about acquiring systems, in particular systems currently owned by Adelphia, which is up for sale. “We oppose FCC consideration of any such transaction unless and until the Commission complies with its 11-1/2-year-old statutory mandate, and its 3-year- old judicial directive, to establish a limit on cable horizontal ownership,” the letter said.

A Comcast spokesman declined to comment, and a TWC spokesman didn’t respond to a request for comment by our deadline. Industry officials called the letter premature since neither company has made overtures to Adelphia, though both have indicated willingness to make acquisitions.

The consumer groups complained that the FCC has let the issue linger unnecessarily. “Despite repeated public and private assurances from the staff that action on this [issue] would be forthcoming, it appears that it will be months, at the least, before the Commission will consider the question,” the letter said. Privately, FCC officials have told us they continue to work on it, though it’s not considered a front burner issue given the agency’s current focus on the digital transition and indecency.

The Media Bureau sent a set of recommendations to the 8th floor last year (CD June 11 2003), but the item apparently didn’t get past that point. Old FCC rules had said no MSO could own cable systems with more than 30% of national cable subscribers, and programming in which an MSO has an attributable interest could fill no more than 40% of channels on cable system. But the U.S. Appeals Court, D.C. 3 years ago reversed and remanded the limits (CD March 5/01 p1), saying in Time Warner v. FCC that the agency had offered no justification for its horizontal limit. The court also said the FCC “seems to have plucked the 40% limit out of thin air.” The FCC later issued a rulemaking in reaction to the court decision, but no decisions have been made. “The delay in action on the court’s remand is unconscionable,” the consumer groups wrote. They noted that the 1992 Cable Act directs the FCC to adopt a limit on cable MSOs. The consumer groups would actually like a limit more stringent than 30%.