May 17, 2010

Supreme Court Rejects Cablevision’s Appeal

On Monday, the U.S. Supreme Court said that it would not hear an appeal by Cablevision Systems Corp. to the Federal Communications Commission's (FCC) must-carry requirement that forces cable systems to carry programming of broadcast television to stations.

The court upheld the 1992 law in a 1997 hearing that obligates cable television companies to carry local broadcast stations.  However, Cablevision said circumstances have changed since then and the monopolistic nature of the cable industry has been replaced by stronger competition.

Cablevision's appeal was rejected by the high court without any comment, siding with the FCC.

Last year, a U.S. appeals court in New York upheld the FCC's decision to require Cablevision's cable systems on Long Island to carry WRNN, a station from upstate New York that broadcasts mostly home-shopping programming.

Cablevision, which is the nation's fifth-largest cable TV operator, then appealed to the Supreme Court.  A number of cable television companies supported the appeal, including Time Warner Cable Inc. and the National Cable & Telecommunications Association, an industry trade group.

Spokesman at Cablevision Jim Maiella said WRNN moved its transmitter so that it could be located within Cablevision's services area and it has no local viewers.

"In doing so, WRNN has exposed just how obsolete these regulations have become, especially in light of the vigorous competition and other market conditions that have developed over the last decade," Maiella told Reuters.

The National Association of Broadcasters said the higher court's move validates its long-standing assertion that must-carry rules protect the public's access to niche broadcast programming, such as foreign language, religious and independent TV stations.

"Today is a great day for the millions of Americans who rely on the diverse line-up of programming supplied by free and local broadcasters," NAB Executive Vice President Dennis Wharton said in a statement.

The Supreme Court's action comes during a time of standoffs between programmers and distributors over retransmission fees, or the amount broadcasters charge to distributors who deliver the free-to-air signals to their subscribers.

In the past, broadcasters have allowed cable companies to carry those signals for free.  However, as advertising rates fell, they have been pushing for this alternative revenue.

The 1992 law required cable operators to devote as much as one-third of their channels to local private and public broadcast stations.

A spokeswoman for the FCC declined to comment on the Supreme Court's order rejecting the company's appeal.


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