National Cable Ownership Cap
The national cable ownership cap established a limit on the number of households a single cable operator may serve. The cap was instituted in response to the 1992 Cable Act which directed the FCC to establish limits on the number of subscribers a cable operator may serve and on the number of channels a cable operator may devote to affiliated programming. In 1999, the FCC set a subscriber limit of 30 percent and prohibited a cable operators from carrying affiliated programming on more than 40 or 45 percent of its channels, depending on the channel capacity for the system.
“Attribution” rules form the basis upon which the FCC’s ownership rules operate. Ownership rules would be straightforward to apply if one person owned each company. However, in today’s world, companies are owned and influenced through many complex relationships, partial shares, and subsidiaries. The FCC’s attribution rules attempted to recognize these complex relationships, and are similar to rules used by the SEC to detect influence over a corporation.
The attribution rules along with ownership car were challenged in court by the cable industry. In March 2001 the U.S. Ct. of Appeals for the DC Circuit remanded the ownership limits back to the Commission concluding the FCC’s selection of a 30 percent cap was not sufficiently well-justified to withstand constitutional scrutiny. In September 2001, the FCC initiated a proceeding to consider changes to the national ownership cap and attribution rules on remand from the court. An order from the FCC has yet to be released.