Press Release
Court's Decision to Throw Out Cable Ownership Cap Hurts Consumers
Contact: Timothy Karr, 201-533-8838
WASHINGTON -- Today, a federal court threw out the Federal Communications Commission's rule to cap cable ownership at 30%. The rule served as an important consumers protection from media consolidation and growing cable cartels, and encouraged diversity in ownership in the cable industry. The court ruled the FCC's action as "arbitrary and capricious," and said the Commission failed to consider competition from other platforms, mainly satellite. The same court threw out the rule in 2001, but it was reinstated by the FCC in 2008 due to fears of growing market power of big cable companies.
Ben Scott, policy director of Free Press, made the following statement:
"It is regrettable that the court tossed out an important public interest protection against excessive media consolidation. Congressional intent in the Cable Act of 1992 is very clear - the goals of federal policy in the cable industry are to promote competition, consumer choice, and a diversity of programming. And yet today we have a cable cartel - the video industry is dominated by only a handful of large cable operators and studios.
"Today consumers experience perpetual price hikes by large operators that already have market dominating purchasing power to decide the fate of new channels. The promises of lower prices through competition from satellite and telecom companies in the video business have never been realized. We encourage the FCC not only to revisit cable ownership limits, but to examine a variety of policy proposals to achieve Congress’s goal to bring consumers more competition and more choice in the cable industry."
Ben Scott, policy director of Free Press, made the following statement:
"It is regrettable that the court tossed out an important public interest protection against excessive media consolidation. Congressional intent in the Cable Act of 1992 is very clear - the goals of federal policy in the cable industry are to promote competition, consumer choice, and a diversity of programming. And yet today we have a cable cartel - the video industry is dominated by only a handful of large cable operators and studios.
"Today consumers experience perpetual price hikes by large operators that already have market dominating purchasing power to decide the fate of new channels. The promises of lower prices through competition from satellite and telecom companies in the video business have never been realized. We encourage the FCC not only to revisit cable ownership limits, but to examine a variety of policy proposals to achieve Congress’s goal to bring consumers more competition and more choice in the cable industry."
