Federal Court Ruling Shakes Up Cable Industry

FCC limit doesn't take into account other sources of competition, court rules
By Nick McMaster,  Newser Staff
Posted Aug 28, 2009 2:42 PM CDT
In this Jan. 7, 2008 file photo, a projected image of the Comcast logo is seen at the Consumer Electronics Show in Las Vegas.   (AP Photo/Paul Sakuma, file)
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(Newser) – In a decision that could revolutionize the communications industry, a federal appeals court has struck down an FCC rule prohibiting a cable TV company from serving more than 30% of the market, Reuters reports. The court declared the rule "arbitrary and capricious,” noting that cable operators face competition not just from one another but from satellite TV providers and telephone companies as well.

"Cable operators, therefore, no longer have the bottleneck power over programming that concerned the Congress in 1992,” the court said. The FCC rule, set in 1993, has been repeatedly disputed. The ruling could set off a round of industry mergers. Comcast, the biggest US cable provider, may now attempt to buy smaller firms such as Cablevision, Charter Communications, or Cox Communications.