Supreme Court Rejects Cable-Ownership Case

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The U.S. Supreme Court on Tuesday ended the cable industry's challenge to a
law that allows the Federal Communications Commission to limit the size of cable
companies.

The court issued an order denying review of a case brought by Time Warner
Entertainment, a limited partnership that includes the bulk of AOL Time Warner
Inc.'s cable systems.

The high court did not provide an explanation for its decision denying
review, although the court announced that Justice Sandra Day O'Connor did not
participate in the decision.

Last May, a panel of the U.S. Court of Appeals for the District of Columbia
Circuit ruled that Congress did not violate the First Amendment by allowing the
FCC to cap the size of cable systems. Congress passed the law in 1992.

In October 1999, the FCC adopted a rule that limits cable operators to no
more than 30 percent of subscribers to cable, direct-broadcast satellite and
other pay TV services. There are about 85 million pay TV subscribers.

TWE and AT&T Corp. are challenging the 30 percent cap and various
ownership-attribution rules. A decision by a panel of the D.C. Circuit Court is
pending.

In addition to upholding the decision on the cable-ownership law, the Supreme
Court also refused to review the D.C. Circuit's decision upholding the
constitutionality of a law that permits the FCC to cap the number of channels a
cable operator may occupy with affiliated programming.

Under FCC rules, a cable operator may not occupy more than 40 percent of its
first 75 channels with affiliated programming.

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