TV Station-Cable System Ban Voided

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Washington -- A federal court here voided a federal rule Tuesday that
effectively barred the common ownership of a cable system and a TV station in
the same market.

In the same decision, the U.S. Court of Appeals for the D.C. Circuit sent back to the Federal Communications Commission a rule that limited a TV station owner's reach to 35 percent of the
nation's households.

Both News Corp. and Viacom Inc. exceed the 35 percent limit.

The court remanded the 35 percent cap to the FCC for further consideration, but it eliminated the cable-TV ban
'because we think it unlikely the [FCC] will be able on remand to justify
retaining it.'

The court said the FCC failed to demonstrate that the cable-TV station ban
was necessary to protect competition, especially from direct-broadcast satellite
carriers.

When Time Warner Inc. acquired Turner Broadcasting System Inc., the FCC
ordered Time Warner to divest a cable system in the Atlanta market where the new
company would also own television station WTBS.

Although expected, the court's decision is likely to lay the groundwork for
greater media consolidation within the broadcast industry and between the cable
and TV-station industries.

The FCC is currently debating whether to modify or
eliminate a rule that bans the common ownership of a broadcast property (TV or
radio) and a daily English-language newspaper.

 'While we were not a party to the case, we welcome the increased
flexibility the decision will provide to cable operators in an increasingly
competitive and diverse media marketplace,' National Cable &
Telecommunications Association spokesman Marc Osgoode Smith said in a
prepared statement.

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