Court Tosses "Arbitrary" FCC Cable Market Cap

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Ars Technica reports:

The United States Court of Appeals for the DC Circuit has just thrown out the Federal Communications Commission's (FCC) rule limiting each cable provider to no more than 30 percent of the overall video marketplace. In the words of justices, the rule was "arbitrary and capricious," and the FCC's "dereliction in this case is particularly egregious."

This "30 percent" rule goes back to 1992, when Congress passed the Cable Television Consumer Protection and Competition Act. The law directed the FCC to write rules that would "ensure that no cable operator or group of cable operators can unfairly impede... the flow of video programming from the video programmer to the consumer."

In other words, Congress wanted to keep any one cable company from getting so large that it could single-handedly cause a TV channel to fail by refusing to carry it.

So the FCC went to work, and in 1993 decided that cable operators should be capped at controlling no more than 30 percent of all subscribers. The 30 percent limit stayed fixed over the years, even as the FCC changed the underlying formulas it used to make these calculations. It looked like the agency had settled on the number and wasn't going to change it based on anything so pedestrian as the facts.

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