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DC Circuit strikes down FCC rule limiting cable companies' market control

[JURIST] The US Court of Appeals for the District of Columbia Circuit [official website] on Friday struck down [opinion, PDF] a Federal Communications Commission (FCC) [official website] rule preventing cable companies from controlling more than 30 percent of the US market. In a challenge brought by Comcast [corporate website], the nation's largest cable company, the court found the rule to be arbitrary and capricious. The court held that "the 30% subscriber limit is arbitrary and capricious because the Commission failed adequately to take account of the substantial competition cable operators face from non-cable video programming distributors." FCC Chairman Julius Genachowski said [press release] "[t]he FCC staff is currently reviewing the Court's decision with respect to the limit previously adopted and the Commission will take this decision fully into account in future action to implement the law."

In 2001, the DC Circuit struck down a previous version of the FCC rule that also set a 30 percent cap but used a different formula to calculate market share. The rule was reinstated [press release] in 2007. The FCC originally set the rule in 1993 under the Cable Television Consumer Protection and Competition Act of 1992 [47 USC § 533(f)(1) text], which directed the FCC to "prescrib[e] rules and regulations ... [to] ensure that no cable operator or group of cable operators can unfairly impede ... the flow of video programming from the video programmer to the consumer." Cable companies have long objected to the rule, arguing that it violates their First Amendment right to free speech.

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