FCC Not Challenging Cable Case

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The Federal Communications Commission Monday decided against asking a federal
court in Washington, D.C., to review a March decision that voided key FCC
cable-ownership rules, agency sources said.

On March 2, a three-judge panel of the U.S. Court of Appeals for the District
of Columbia Circuit ruled as unconstitutional under the First Amendment an FCC
rule that limited one cable operator to no more than 30 percent of pay TV

The FCC had until April 16 to seek rehearing by the full D.C. Circuit bench,
but the agency decided not to challenge the ruling.

An FCC source said the agency was responding to the March 2 ruling by
determining whether it can do a better job of justifying the 30 percent cap.

In recent weeks, FCC chairman Michael Powell has said it appeared that the
court would accept only a higher cap. In its opinion, the court said the
commission was probably able to justify a 60 percent cap.

In addition to striking down the 30 percent cap, the D.C. Circuit panel also
tossed out a rule that barred cable operators from occupying more than 40
percent of their first 75 channels with affiliated programming.

The court decision was a big break for AT&T Broadband, the only cable
operator with more than 30 percent of pay TV subscribers.

The MSO faced a May 19 deadline to sell programming or cable-system assets to
comply with the FCC's rule. Last month, in response to the court decision, the
agency suspended the May 19 deadline indefinitely.

Earlier Monday, Media Access Project, a public-interest law firm based in
Washington, said it would ask the D.C. Circuit for rehearing. If the court
denies MAP's request, it would have 90 days to seek U.S. Supreme Court