It may be a rumor, but it's got the feel of fact. Word has it that the Federal Communications Commission may be considering a new ownership ceiling that would prevent cable industry leader Comcast
According to a legal advisor to FCC Commissioner Jonathan Adelstein, the commission is considering a proposal by its chairman, Kevin Martin, to prevent any one cable multisystems operator (MSO) from serving more than 30% of the nation's total cable customers. Following its acquisition of the last of the former Adelphia subscribers, Comcast today services nearly 25 million customers, or about 27% of the pay-TV market.
Until 2001, the FCC had a 30% cap on any one company's ability to serve the totality of pay-TV customers. In that year, however, the ceiling was struck down by a federal appeals court as an obstruction of free speech.
Chairman Martin is viewed by some as unfriendly to the cable operators. Indeed, medium-sized operator Mediacom
Comcast has grown rapidly to its present size. At the beginning of the current decade, its video subscriber base numbered about 6 million. In recent years, however, it has completed a number of cable acquisitions and, like its cable-industry brethren Time Warner Cable
In addition to its sizable group of cable television subscribers, Comcast also provides high-speed Internet connectivity to 11.5 million customers, and telephone service to about 2.5 million subscribers. Thanks to the pace of its subscriber additions in recent quarters, the company's share price has increased more than 45% during the past year.
So, Fools, we could be in for a skirmish worth watching. Comcast executives and the National Cable and Telecommunications Association both obviously oppose the implementation of any sort of subscriber ceiling. And with telephone companies Verizon
Nevertheless, I continue to believe that Fools with an appetite for solid, well-managed media companies should keep a close eye on Comcast.
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