DirecTV, Rivals Don’t Seek Cable Limits in FCC Comments

DirecTV, which wants FCC conditions on the sale of Adelphia, isn’t seeking cable ownership limits in the latest FCC rulemaking on horizontal and vertical caps. Other cable rivals, including Qwest, also said they don’t favor caps. Instead, they said they want a level playing field, as some Bells seek to compete head-to-head with cable in selling video services. Comcast, in comments similar to NCTA’s filing (CD Aug 10 p7), told the FCC limits aren’t needed to ensure competition. Yet if some media activists have their way, limits will be set.

DirecTV said competitive issues are best addressed in transaction reviews. It had asked the FCC to put conditions on Time Warner and Comcast’s proposed $17.6 billion purchase of Adelphia systems (CD July 25 p6). “Transaction review allows the Commission to better define anticompetitive problems associated with regional concentration,” DirecTV said. “It would be difficult for the Commission to devise regional caps that reflect this market reality.” The DBS provider voiced concern that Comcast and Time Warner’s super-clustering strategy with Adelphia would give them undue power to negotiate favorable local programming contracts. In the Aug. 8 filing on caps, DirecTV said the FCC might have trouble determining “a real and non-conjectural situation where a single cable operator can unfairly impede the flow of video programming sufficient to justify a cable ownership limit.”

EchoStar, although fretful over the Adelphia purchase, hasn’t advocated a general cable ownership limit. “We're really in favor of addressing the ill consequences of the size that cable companies have managed to attain,” a spokesman said. He declined to say if EchoStar, which has not filed comments in the ownership rulemaking, will take a public position on cable caps. Still, he said, cable conglomeration is “a problem here, and it has to be addressed.” The FCC is seeking comments because cable ownership limits were remanded by the D.C. Circuit Court in Time Warner v FCC in 2001. The comment period was extended last month, with a new reply deadline of Sept. 9 (CD July 26 p11).

At least one Bell isn’t seeking caps either. Qwest said it worries more about stimulating competition than imposing rules. “In general we don’t favor regulation that imposes caps on the number of customers a cable operator can have,” James Thurman, dir. of policy & law communications, said in an e-mail to us last month. “Instead, as with telecom, we favor competition,” he added. Like other Bells, Qwest hasn’t filed formal comments on cable caps.

Media activists said they want caps to ensure consumers have access to a wider array of programming. A Free Press campaign against cable consolidation has generated some 19,000 e-mails to the FCC, and the group predicts more. In an Aug. 8 joint filing with the Consumer Federation of America and Consumers Union, Free Press demanded a horizontal ownership limit of 20-30% of all cable customers. “There’s a lot of traction on the issue, and I think you will see more,” said a Free Press spokesman. “People are finally really taking notice.” - Jonathan Make