WASHINGTON A U.S. federal appeals court on Friday upheld communications regulators' decision to bar cable operators from blocking access to some sports programing.
The Federal Communications Commission closed a loophole last year that allowed cable companies to deny access to channels delivered via terrestrial ground lines and not satellite feeds.
The U.S. Court of Appeals for the District of Columbia Circuit denied Cablevision Systems Corp's challenge that the FCC lacked the statutory authority to regulate the withholding of such programing.
"We see nothing in the statute that unambiguously precludes the Commission from extending its program access rules to terrestrially delivered programing," the D.C. Circuit said on Friday.
But the court did vacate one part of the order, which the FCC will have to reexamine before any program access complaints can be addressed.
The D.C. Circuit said the agency "acted arbitrarily and capriciously" by concluding that exclusive terrestrial programing contracts are categorically unfair.
"Given the local and regional nature of terrestrial programing, such exclusives can be highly pro-competitive, particularly in markets like New York with as many as five video providers," a Cablevision spokeswoman said in a statement.
"Verizon and AT&T, the nation's two largest phone companies, should be required to compete based on the quality of their products and not by manipulating federal law," she added.
Verizon Communications Inc, AT&T Inc and satellite providers DirecTV and DISH Network Corp had long complained they had been denied access to sports programing in some lucrative markets by incumbent cable companies.
Bob Quinn, AT&T's senior vice president of federal regulatory and chief privacy officer, commended the court's decision to prevent cable operators from withholding popular programing like high-definition sports.
"We are hopeful that the FCC now will move quickly on our pending complaint against Cablevision so that consumers in Connecticut can enjoy the full benefits of competition," he said.
The FCC voted 4-1 on January 20, 2010, to establish a formal process to apply for sports programing and for cable operators to appeal.
The order puts cable operators that do not share their terrestrially-delivered networks with competitors in violation of FCC rules against unfair acts or practices.
(Reporting by Jasmin Melvin, editing by Gerald E. McCormick)