Court OKs Comcast-AT&T Broadband Merger

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Washington -- A federal court here ruled Friday that the Federal Communications Commission's approval of Comcast Corp.’s merger with AT&T Broadband was appropriate, rejecting claims by consumer groups that the agency should have been more demanding on the companies.

In a unanimous opinion, a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit affirmed the FCC's approval of the largest cable-system merger, lifting a legal cloud one year after the deal closed.

The Consumer Federation of America and other groups went to court as a part of strategy to force the FCC to require Comcast to grant access to multiple Internet-service providers postmerger.

While the merger was pending, FCC staff refused to require AT&T Broadband and Comcast to place in the record a copy of their ISP agreement with AOL Time Warner Inc. (now Time Warner Inc.) that would govern America Online Inc. access to Comcast customers after merging with AT&T Broadband.

The consumer groups alleged that because the AOL ISP agreement barred AOL from providing video streaming and because FCC staff was unwilling to make the agreement part of the administrative record, the agency failed to give close examination to Comcast's enormous new market power flowing from control of 21 million cable customers.

In an eight-page opinion, Judge A. Raymond Randolph said the FCC did not need to use the cable merger to establish cable ISP-access policies. The commission, he said, could cover all cable companies through a rulemaking.

"The [FCC's] decision not to address them in this particular case is consistent with its broad jurisdiction to choose between rulemaking and adjudication," Randolph wrote.

Randolph added that the consumer groups did not necessarily need to see the AOL ISP agreement in order to make all of their arguments that the FCC had been deficient in not requiring cable companies to carry competing ISPs.

"Thus, the decision to exclude the agreement from the record could not have affected the outcome of the proceeding. It was, at worst, a harmless error," Randolph said.

Joining Randolph were Judges Harry T. Edwards and Douglas H. Ginsburg.

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