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Proposed FCC rule would limit Comcast

Wed, 03/14/2007 - 7:45am

Copyright 2007 Los Angeles Times
All Rights Reserved
Los Angeles Times
March 14, 2007 Wednesday
Home Edition
From Bloomberg News and Lexis Nexis

Comcast Corp., the nation's largest cable operator, would be effectively barred from buying any other large cable company under a new ownership rule the Federal Communications Commission is considering.

The rule would block companies from owning systems that reach more than 30% of cable TV subscriber households. Philadelphia-based Comcast reached about 27% after buying systems from Adelphia Communications Corp. and Time Warner Cable Inc.

FCC Chairman Kevin J. Martin circulated the proposed ownership cap to other commissioners Monday, said Rudy Brioche, a legal advisor to Commissioner Jonathan S. Adelstein.

The proposal resurrects rules the agency has sought to impose since 1992, when Congress authorized limits. Federal courts have struck the FCC's efforts.

"If you are a seller of cable systems, you should be opposed to this," said Blair Levin, a Washington-based analyst with Stifel Nicolaus & Co. "If you are a buyer of cable systems other than Comcast, you would be in favor."

Tamara Lipper, a spokeswoman for Martin, declined to comment on the proposed order.
Comcast spokeswoman Sena Fitzmaurice also declined to comment, noting the company had not yet seen the proposal.

The cable industry's trade group criticized the plan. "Any FCC order adopting the same 30% cap tossed out by the courts would be astonishing," said Kyle McSlarrow, president of the National Cable & Telecommunications Assn.

Given the increased competition from satellite services and phone companies, McSlarrow said, the agency should eliminate the ownership cap for cable.

The FCC's proposal comes six years after the U.S. Court of Appeals for the District of Columbia threw out the previous 30% ownership cap, saying the agency had failed to provide justification for the limit.

Shares of Comcast fell 66 cents to $25.51.

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