The Federal Communications Commission may consider a long-dormant proposal that would cap the number of customers a single pay-television company may serve, agency officials said Thursday.Chairman Kevin Martin is circulating the proposal among his fellow commissioners for a possible vote at the agency's next meeting, scheduled for Dec. 18. Martin, fresh off a marathon meeting that featured a bruising battle with the cable industry, also wants commissioners to vote on a number of media ownership issues, including his proposal to allow one company to own both a newspaper and a radio or television station in the nation's 20 largest markets.

Fearing the potential monopoly power of cable television companies, Congress in 1992 directed the FCC to establish limits on how many customers cable and satellite television companies could reach nationwide. The FCC settled on a 30 percent cap, but the U.S. Court of Appeals for the District of Columbia Circuit rejected the rule in 2001, saying the agency had failed to adequately justify its reasoning.



The issue has remained largely dormant since then as direct broadcast satellite providers — and more recently, traditional telephone companies — have continued to cut into the market share of the nation's major cable television companies.

Martin is proposing to again set the customer cap at 30 percent, said three FCC sources who declined to be named because the proposal has not yet been made public.

The immediate impact of such a cap would appear to be negligible. Comcast Corp., the nation's largest cable company, reported 26.2 million subscribers through Sept. 30, for a nationwide market share of 27 percent. The company says it lost 65,000 subscribers in the last quarter.

Comcast, in a statement attributed to executive vice president David Cohen, said the proposed cap is "perplexing" given the agency's approval last year of AT&T Inc.'s buyout of BellSouth Corp. Comcast competes with AT&T for phone, video and broadband customers. Cohen said it is "unthinkable that the government would constrain the ability of cable companies like Comcast to compete with these colossal companies that have virtually unlimited financial resources."

Consumer groups support a cap. Gene Kimmelman, vice president for federal and international affairs for Consumers Union, said if the largest cable companies were permitted to merge, it would create "an enormous competition problem" for any new entrants. Too much control also would make it difficult for independent programmers to get their shows on cable systems, he added.

Martin has been pushing the cable cap for months but has been unable to muster the votes to get it passed. On Tuesday, in a commission meeting delayed for 12 hours, Martin failed to convince his fellow commissioners that the cable industry had gotten big enough to trigger a provision giving the agency more authority over the industry.

His prospects may be somewhat brighter regarding the cap, however. Martin likely will be joined by the two Democrats on the commission, Michael Copps and Jonathan Adelstein, which would give him a majority.

The court in 2001 also invalidated the FCC's "vertical" ownership limits. That rule prohibits a company from carrying affiliated programming on more than 40 percent of its channels for systems up to 75 channels. The commission will be asked to consider comment on whether to reinstate that rule.

At the same meeting, commissioners may consider a number of minority ownership proposals that were deleted from Tuesday's agenda.

Among them is a Martin plan that would require broadcasters to lease excess TV channels that will become available following the transition to digital television to small businesses that may be owned by women and minorities. That proposal is also opposed by the cable industry because cable companies would be forced to carry those channels.

Martin's proposal regarding cross-ownership of newspapers and broadcast stations is also set for a vote. That decision is facing a potential legislative challenge. The Senate Commerce, Science and Transportation Committee will consider a bill on Dec. 4 that would delay the vote to allow time for more study and public comment.

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