The U.S. Supreme Court said on Monday that it would not hear an appeal by Cablevision Systems Corp to the Federal Communications Commission's must-carry requirement that forces cable systems to carry programing of broadcast television stations.
The high court in 1997 upheld the 1992 law that obligates cable television companies to carry local broadcast stations. But Cablevision said circumstances have since changed and the monopolistic nature of the cable industry has been replaced by vigorous competition.
The justices rejected Cablevision's appeal without any comment, siding with the FCC.
A U.S. appeals court in New York last year upheld the FCC's decision to require Cablevision's cable systems on Long Island to carry WRNN, a station from upstate New York that broadcasts mostly home-shopping programing.
Cablevision then appealed to the Supreme Court. It was supported by a number of cable television companies including Time Warner Cable Inc and the National Cable & Telecommunications Association, an industry trade group.
Jim Maiella, a spokesman at Cablevision, based in Bethpage, New York, said WRNN moved its transmitter so that it could be located within Cablevision's services area and it has no local viewers.
In doing so, WRNN has exposed just how obsolete these regulations have become, especially in light of the vigorous competition and other market conditions that have developed over the last decade, Maiella said.
The National Association of Broadcasters said the Supreme Court move validates its long-standing assertion that must-carry rules protect the public's access to niche broadcast programing, including foreign language, religious and independent TV stations.
Today is a great day for the millions of Americans who rely on the diverse line-up of programing supplied by free and local broadcasters, NAB Executive Vice President Dennis Wharton said in a statement.
The high court's action comes amid standoffs between programmers and distributors over retransmission fees, or the amount broadcasters charge to distributors who deliver the free-to-air signals to their subscribers.
Broadcasters have in the past allowed cable companies to carry those signals for free but as advertising rates fall they have been pushing for this alternative revenue.
The 1992 must-carry law required cable operators to devote as much as one-third of their channels to local private and public broadcast stations.
An FCC spokeswoman declined to comment on the Supreme Court's order rejecting the company's appeal.
Cablevision shares moved higher in morning trading, but were down 18 cents at $24.21 by afternoon, and Time Warner Cable shares fell 5 cents to $51.55 on the New York Stock Exchange.
Shares of Comcast Corp, the No. 1 U.S. cable operator, were up 5 cents at $17.66.
(Reporting by James Vicini and John Poirier; editing by Gerald E. McCormick and Maureen Bavdek)