Description

Limits on the size of a cable operator’s subscriber-audience are unconstitutional, argue Kenneth Ferree and Berin Szoka, President and Senior Fellow at The Progress & Freedom Foundation, in an amicus brief filed with the U.S. Court of Appeals for the District of Columbia Circuit. The brief, filed in the case of Comcast v. FCC, argues that the provisions of the 1992 Cable Act authorizing the FCC to impose a “cable cap” are outdated and do not reflect the current state of the video distribution and programming markets. Because cable is no longer the unique “bottleneck” that it was in 1992, these statutory provisions must be subject to strict scrutiny under the First Amendment as a limitation on free speech. Because there are "less restrictive means” of ensuring cable operators do not impede the flow of video programming to consumers, the court should strike down these provisions.

The authors question cable's ability to act as a "gatekeeper" of programming. The authors cite "the increasing competitiveness of the Multichannel Video Programming Distribution (MVPD) market and steady decline in vertical integration between cable operators and programmers" as causes of the decline of cable’s gatekeeper power. This is evidenced by the fact that there are nearly six times as many programming services available today as in 1992. Moreover, the availability of television content over satellite, telephone fiber and the Internet means more choices for consumers and more distribution channels for programmers.

The authors also argue that the 30% cap imposed by the FCC last year is even more obviously unconstitutional than the same limit was when it was struck down by the D.C. Circuit seven years ago. They question the “open-field” model behind that cap, stating it is "based on flawed assumptions about the nature of competition for video programming” and incapable of “accurately reflect[ing] cable's present (or future) bottleneck power." Instead, Ferree and Szoka state, "a model that truly reflected the competitive pressure on cable operators would actually produce a gradually higher cap as cable's market share continues to fall."

Ferree and Szoka suggest there are a variety less restrictive means to ensure competitive video distribution and programming markets. These include dispute resolution assisted by the FCC, enforcement of existing antitrust laws, and crafting "special obligations on cable operators with more than 30% of the MVPD market to ensure that they do not unfairly impede the flow of video programming."

The Progress & Freedom Foundation is a market-oriented think tank that studies the digital revolution and its implications for public policy. It is a 501(c)(3) research & educational organization.